If you own it and copy if for a backup you are fine and it is legal. If you rent it or borrow it and copy it you are wrong and it is illegal. It
is that simple. The law says that you are entitled to make 1 backup copy of software you own "For Your Own Use Only". So if this is what you are doing, then it is legal. Of course, this is USA Laws that I am talking about since I live in the USA, I do not know what other countries laws state. But I'm willing to bet that they are similar. If you copy software that you don't own, then it is illegal and you are a pirate. The laws say that too.
Disturbed, you say that everyone copies CDs. Do you mean legally or illegally? I ask because not everyone does illegally as voiced by some members on this board and those who do are still wrong, no matter how many choose to do it illegally. They are wrong. Sheer numbers of people doing a wrong thing does not justify it, it is still wrong. Bottom line, if you copy PSX CDs illegaly you are a thief and a pirate. End of story.