A full-blown PSOne emulator for PS3 — credited to an “anonymous source” — has been released. A port of the PC-based PCSX, it serves as an alternative to the built-in equivalent with support for “2 player, saving, and ISO container formats *.iso *.bin *.mds *.img.”

Furthermore, the author notes that an open-source PSL1GHT compile is incoming with added features like savestates and cheat capabilities. More details from the included readme:

PS3SX PCSX port on PS3 using PS3 SDK and psl1ght it’s a hybrid for the pre-release. Source code will be available once I will completely port the emulator to PSL1GHT. Before xmas I will update it with a new GUI save state and cheat code.

Note that a dumped copy of the PS1 bios — not included — is required.

PS3SX Download

Exclusive – PS3SX PSX Emulator Released [PSGroove.com]