It's quite difficult to write the history of a band that had only a few songs officially recorded with no releases, especially one that existed some 25 years ago. However, Psycho plays an important role in Estonian prog, and was one of the most aggressive and innovative bands of the day.
During its heyday of 1976-77, the band played an aggressive form of instrumental prog with a lot of improvisation, much like the Wetton-era of King Crimson. Many of the tracks were as ambitious as the aforementioned prog kings, such as the ethnically-influenced odd-time wonder "Raja 21/8" and many others. No other Estonian band matched these guys in their improv prowess; rather, not many bands around Europe during those days managed that feat either.
The band has its roots back in 1973, put together by several budding musicians like drummer Paap Kõlar and guitarist Andres Põldroo -- who was an early member of Ruja. Ironically in 1976 Toomas Veenre -- the first guitarist of Ruja -- joined Psycho as its violinist. The quartet of Põldroo, Veenre, Kõlar and Heigo Mirka was in turn Estonia's own King Crimson, playing wild instrumental improvs with a strong violin part. Again, you can see the KC connection there. But the band was also influenced by bands like Mahavishnu Orchestra and even the works of Pekka Pohjola. Some of the band's best pieces, like "Illuminatsioon" and others were fabulous crowd-pleasers during the band's short but strong heyday.
The band fell apart in 1977 as members took up other musical projects, ranging from orchestras to pop-rock bands. They did record a few songs before calling it a day; the session recorded the fabulous instrumental "Nomina sunt odiosa" and the classic "Naera, naera" -- the latter with the vocals of top rock singer Tõnis Mägi. However, some of their most ambitious pieces remain unrecorded and generally unavailable. That is indeed a shame, since Psycho did play a major role in Estonian prog and was itself a fabulous band.