Recommendations are based on purchases of other PlayStation Network members who have bought the same item you're looking at. Various web merchants like Amazon use a similar feature. In addition to helping you discover games you may not know about, the feature should bag Sony a few extra sales – a win win as long as you're not a compulsive shopper.
Sony hasn't provided an exact release date for firmware update 3.41, but it's expected "shortly" and the recommendation features should be live by the end of July. Additionally, a minor stability update is in the pipeline for the company's PlayStation Portable, but again, no specific date is mentioned.