Sony has filed a patent for the cell processor to emulate the Emotion Engine bringing back PS2 backwards compatibility to all PS3's
There are two main ways to emulate hardware. Interpretation is when target code is decoded and converted into a language the host can understand. The other strategy is to decode and recompile programs in the host?s language. Maybe the concept is better explained another way. Interpretation is like having someone constantly translating English to Japanese for you, non stop, twenty four hours a day wherever you go. Decoding and recompiling is like someone translating a sets of words and putting them in a dictionary you can reference.
Maybe we will see backwards compatibility in upcoming 3.0 firmware update.
More information available via link below: [ViA