At the main menu, press Square(2), Circle(2), L1(2), R1(2), L2(2), R2(2). There is no confirmation message.
Start a game, then pause and enter the options screen.
The "Cheats" option will be unlocked at the options menu, with "Trooper Level", "Enemy AI", and "Mission List" selections.
Note: Do not set the "Trooper Level" option to "Full", as one bullet hit will take half of your life away.