If you've got a Phat PS2, then you've got it easy. Follow the directions for the 'Independence Exploit'. The only purchase you'd really need would be the Pro Action Replay Max and possibly a USB Flash drive if you don't already have one.
Emulation on the PS2 is in a pretty sad state, I'm afraid. Homebrewers seem to have jumped from the Dreamcast to the XBox, then the PSP and NDS. The Best-running emulators you'll find are actually the Genesis and the SNES. NES Emulation is relatively crappy, and PSX and N64 emulation is non-existant.
The best homebrew things you can do with your PS2 are SMS which lets you stream video over a network to your PS2, and loading your PS2 games onto a non-SONY HD using HDLoader to extend the life of your Optical Drive and get faster load times.
It'd be great if PS2 emulation could find a few dedicated coders again, but that seems sadly unlikely.
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