Firmware version 4.21 was a turning point for the PS3 hacking community. While later firmwares (4.46, 4.55, 4.81, etc.) also support PS2 emulation, the 4.21 era introduced key improvements:
A solves this. It repackages your own Bully ISO (NTSC-US recommended) into a signed package that the PS3’s internal PS2 emulator (Netemu or original EE/IOP) will run natively from the XMB. custom pkg file for ps3 ps2 classics 4 21 bully