After testing different settings, I finally have the available options set to where they are "acceptable". Recording with the PSP works fine. The motion detection in the parked mode works if the car is parked in sufficient lighting. Even at night it works with most of the surrounding street lighting. If I park it in my garage, I just shut the switch on the PSP off and I don't worry about recording in my garage.
As for the image quality, it still kind of sucks. A previous poster mentioned 5 meters, which is about one car length. That said, if you are following the car ahead of you at a safe distance, you will not capture the license plate. There are a LOT of variables to video recording that are out of my control. Is the sun ahead of me or behind me, tree covered roads (in and out of shadows), cloudy, etc.
Watching some dashcam videos on YouTube, I see a lot of cameras with much better quality. Some with worse.