my 60GB PS3 will run any game I throw at it. However, in very rare instances, there's some visual 'quirks' that weren't there on the plain old PS2. Specifically, Shadow of Memories, Yakuza, and ICO all look like they're being processed through a voxel filter now or something weird and shimmery.
Those are the only three games out of the dozens I have in my collection that have been at all problematic, and even then, its not so bad (the issue can be corrected/lessened by turning off the upscaling but keeping the resolution smoothing).
And while we've got PS3 owners here talking about their BC, can you guys tell me why any PS2 game that runs in progressive scan ends up looking worse for it then in 480i?