Latest PS3 firmware update allows PS2 installs
Published on
According to this, the PS3 2.17 firmware upgrade allows users to install PS2 games to their hard drives.
"According to the Japanese PlayStation website, the latest firmware patch also allows users to install PlayStation 2 games to the hard drive," says the piece. "We've contacted Sony to confirm this."
Update: As pointed out in the comments, this isn't what it seems. It's all about stabilising PS2 games that use the HDD, like FFXI. See here.