Xbox controller doesnt work (please read)

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I'm not sure, as I haven't tried Peace Walker myself. I checked the thread for peace walker and from what I can tell the game has a few problems but will run, although slowly at times.
I would suggest just going to http://buildbot.orphis.net/ppsspp/ and downloading whatever the latest build is (the one at the top). Most of the builds have been pretty stable since they implemented the new method for decoding the audio. You will need to downloaded the decoder when prompted, although make sure it is legal for you to do so (if you don't know if it is, click the more info button).