The .CSO file extension is associated with the compression method used to create virtual disks or image files in the ISO format.
.CSO is generally associated with the PSP platform, where it is used to compress dumped playstation portable UMD games (universal media disks).
ISO stands for 'International/Industrial Standards Organisation'.
An image file is a copy of a cd, this is often used as a means around being asked to 'insert cd into drive' whilst playing copied games.
.CSO is currently the most used compression method with regards to PSP titles, this is mainly due to the fact that 'OE' i.e. open edition, and 'Devhook' two popular tools are able to read the .CSO format.