It seems the handler is used as a callback function whenever the network connection state of an adhoc connection has changed.
The state is obtained by calling sceNetAdhocctlGetState(int *event);
Possible connection states:
PSP_NET_APCTL_STATE_DISCONNECTED 0
PSP_NET_APCTL_STATE_SCANNING 1
PSP_NET_APCTL_STATE_JOINING 2
PSP_NET_APCTL_STATE_GETTING_IP 3
PSP_NET_APCTL_STATE_GOT_IP 4
PSP_NET_APCTL_STATE_EAP_AUTH 5
PSP_NET_APCTL_STATE_KEY_EXCHANGE 6
The state is obtained by calling sceNetAdhocctlGetState(int *event);
Possible connection states:
PSP_NET_APCTL_STATE_DISCONNECTED 0
PSP_NET_APCTL_STATE_SCANNING 1
PSP_NET_APCTL_STATE_JOINING 2
PSP_NET_APCTL_STATE_GETTING_IP 3
PSP_NET_APCTL_STATE_GOT_IP 4
PSP_NET_APCTL_STATE_EAP_AUTH 5
PSP_NET_APCTL_STATE_KEY_EXCHANGE 6

