First take the torx bolt out slide the face plate off and remove few phillips screws. Take the metal cover off the top of the bd drive. Then remove the top plastic cover and unplug the sensor. Secure it down with a couple screws. Then cut a circle (with a plastic cutting saw bit) on the top cover. Your face plate now slides back over to allow swapping and still keeping the PS3 looking clean.
Boot the PS2 DVD and wait for it to load. Now hold the PS button and quit the game. Slide your cover back and push down on the disk secure magnet. It will stop the laser, but not the spinning. swap disks and press circle(jp) X to boot your backup.
Tested with 1.10 firmware, swap magic confirmed unplayable with 1.31, but this exploit is unconfirmed with that version of firmware. Swapmagic is only needed for PAL conversion and CD backups.
crappy video: http://www.youtube.com/watch?v=eO1q3TJLr_0