Ah, lovely bit of discussion to spice things up.
OP may have his facts wrong and sources not checked..
But. I have been playing with 3.41 and Hermes for long time.
Then i went to WutangRZA+Geohot+lv2PKG(v1).. and all hell broke loose.
I lost game data, saves (backed up before, i smelled this coming

And ended up formatting my disk after 5-10 hard freezes and reboots.. I figured, after that, everything should be nice & dandy.
But PL3 still messes up a few permissions during ftp, and i need to press L1 before i run any game with Multiman .13 (he has PL3 implemented in it, along with fix permissions). Other than that, it's fine.
So now, on-line works, we're on 3.55 and just need to fix perms each time. Big deal, i can live with that. The benefits outweigh the effort.
To OP: Keep all your stuff in /GAMEZ, goto 3.55 wutang and use latest multiman .13. Press L1 to fix each game, problem solved. (Maybe need to delete gamedata or re-download, but that's not a big deal.)