Actually , PS1 Emulation is handled by software on the PS2. So in theory PS1 games may work one day on PCSX2. The actual PS1 emulation is driven by the BIOS which will detect a PS1 disc being inserted into the PS2 and load the appropriate IRX that will run on the IOP(basically a PS1 on a single chip) , which in turns send all the display info to the GS for outputting. At the moment PS1 detection is turned off. Maybe one day it will be used if PS2 emulation is fully working.