Updating ps3 to play ps2 games
One of the most annoying things about the Play Station 3 is its lack of backward compatibility on some models.
Second, can I replace the internal hard disk with a custom one (something like a 1tb hitachi travelstar)?
I've found reports that the hard disks are user upgradable on wikipedia.
I'm just trying to figure out the current "state of the union." The firmware should only be especially relevant if you have the 80GB model that implemented software emulation (which was comparatively poor at first, although I believe newer firmwares improved it some).
The earlier 20GB and 60GB models actually have the CPU and GPU of a PS2 onboard, so it's practically working natively, and that'd be the best approach.
The newer firmwares do not disable this functionality.
All PS3 systems can play PS1 games on all firmwares (it's all software emulation, which is trivial for a system with the PS3's horsepower), so this shouldn't be a concern.