Every body, engine, upgrad etc. has a code reference. Hybrids alow you to mix diferent parts of cars into one. For instance you can have a mr2 with the engine of a viper in the rear of the chassis, front weel drive and brakes of a nsx. There are also some crazy codes that get high hp into your car like 30000 hp but that just gets the car spinning a LOT.
You need a gameshark to do this (a thing that connects to your psx) or in the case of an emu, a program.