173w ago - Update #2: After examining the PSJailBreak Manager .PKG File below, RichDevX determined that it was hardcoded not to boot on Test consoles, and he has now made available a patch for PS3 Debug users who can decrypt the selfs to run PS3 game back-ups with it!
Below (under PS3 Dev Notes) is some more tech info from his findings for those curious, however, please note the PSJailBreak patch above is only for PlayStation 3 Debug users. At this time it would probably be wise NOT to waste your money on this expensive PSJailBreak USB device, as a FREE PS3 scene solution is bound to surface.
Update: CJPC has received confirmation and xorloser has now confirmed that the PSJailBreak runs unsigned code on the PlayStation 3, so it appears this PS3 mod-chip is indeed legitimate!
According to one individual with a highly questionable reputation, this concept project could work because PS1/PS2 discs are authenticated only once on the VSH though liblv2 and the PIC chip would just automate it.
However, if Sony updates liblv2.sprx and more specifically ps1rom.bin so the emulated mechacon is updated it could be patchable.
Finally, to roughly translate from the video's caption:
"This video montage shows the operation of the chip that we are developing to load copies of PS1 and PS2 (if you're retro) in the PS3.
318w ago - Each week or so we will post a brief report from the resident PS3 Devs here, and below is one for this week:
The PS3 Boot-up Procedure.
The SCC (Super Companion Chip), made by Toshiba gets the PS3 started up. It reads asecure_loader from flash, and loads it into SPE in isolation mode. The Flash reading is interesting, as the data on the flash chips are interleaved, so the SCC merges them, among other things.
asecure_loader is then decrypted and ran, and it brings up lv1ldr. The keys for self decryption (among other things) are most likely accessible at this time.
lv1ldr is then decrypted and ran, and verifies the integrity of lv1.self , decrypts and runs it.
lv1.self is most likely our base code, also known as the Hypervisor. The Hypervisor then calls lv2ldr.
lv2ldr is ran, and it runs lv2_kernel.self
LV2 kernel.self is essentially the PS3OS, it starts up, brings the XMB up, any game/movie in the drive.
This is a solid working theory. Without expensive hardware, we can not confirm this 100%, but it is the most logical approach!