I am using psfreedoom on the htc hd2 and an original 60gb ps3. At first I made a backup of oblivion and it worked great, then I I realized I did not have any space and I decided to do a system restore then I reinstalled backup manger.
I backed up assassins creed II on an external hdd when I go to try and start it through the backup manger the ps3 goes back to the xmb but when I go see what disc is inserted it is dead space not assassins creed II also the same thing happens with god of war III which is backed up to the internal hdd.
Their are two versions of psgroove 1 has all features ie making & playing backups while second one only has backups making feature not playing. Maybe the psgroove version your using hasn't been patched to play backups, just try to find another file that has backup playing support.