You can convert PS1 games to PSP eboot files to avoid playlists but you are better off using playlists. They are very simple once you know how.
If you use regular bin and cue, the folder structure should look like this.
Metal Gear Solid (E) (Disc 1).bin
Metal Gear Solid (E) (Disc 1).cue
Metal Gear Solid (E) (Disc 2).bin
Metal Gear Solid (E) (Disc 2).cue
Metal Gear Solid.m3u
And inside the m3u file the text should be this:
Metal Gear Solid (E) (Disc 1).cue
Metal Gear Solid (E) (Disc 2).cue
Then you open the m3u file with retroarch and you are good to go. The folder structure is even easier if you convert the bin and cue to a CHD file and you also get really good compression.