i have been able to play WITHOUT PROBLEMS a psx game, yes, we are near ps3. The ps2 engines works like linux on the ps3. The xmb is ALWAYS working, but in a second way.Linux works with xmb behind, or that is what is seems from my tests. I have seen, the system reads the type of image and sends info to the ps2 processor or to the cell, depending in the info of the image. While this is working, the xmb is still ON. I have tested ps1 games in both JAP, USA, and EU consoles. The time has been a little fixed, 10 minutes, yeah i know only 5 minutes less, but that is something. My friends are going to continue working on the Psx and ps2 games. I am actually working on the Ps3 games and listen guys, run the proxyserver when you like, so you dont need to update. So as i can see the big BUGS are in linux and the Xmb. Well nothing more.
PS>ps1 and ps2 games can only run on their same region, but wait my friends, wait...