And what format image did you rip, Evanescent?
The -r switch is a command line switch. You can use it in one of three ways: you can start pSX from the command line, but add -r after the executable name (leaving a space between them). Or you can create a shortcut/launcher to start pSX, right click it, click properties and, in the Target/Command panel, move your cursor to the end of the line (after the inverted commas in Windows) and type a space, then -r. Click OK/Close. The shortcut will start pSX with the -r switch.
Or, the easiest way, get
Ultima's pSX Frontend and, when you set up the profile for your game, go to the Switches tab and tick the box that says -r Enable event rescheduling. This profile will start your game in pSX with the -r switch running.