The PS3 is supposed to have all the requirements and hardware built for PS2 game playback, but reports are arriving from some reviewers and player saying "my games don't work."
CNET Japan is saying over 196 PS2 titles are not playing correctly (or at all) on the PS3. Some games function but lack any type of sound. Sony says that they didn't expect 100% of the games to work on launch and will be working on the problem, in some cases, apparently one title at a time.
One title at a time? That sounds much like the method being implemented by Microsoft. One might argue "why did you spend $600 to play PS2 games anyway?" That has some validity, but remember, there are a large number of PS2 titles on the market today. Optimally, gamers want one console plugged into their TV's - not two or more.
They still love their PS2 equipment, sales figures show this to be true, so there is a great chance they'll want to continue to play those titles. This is especially true with the PS3 product launch because there are only a few titles released thus far. Gamers may defeat their new shiny PS3 games to sit and await the next set of titles. What do they do in the meantime? Play PS2 games perhaps.
Sources: IGN.com and gamespy.com