The process seems technical, but once you build your first PKG (try Persona 3 or God of War first), you will realize it takes only five minutes. Your PS3’s hard drive can now hold 50+ PS2 classics, all launching silently from a clean XMB menu.
Technically, a PKG file is the standard installation package used by the PlayStation Store for digital downloads (PSN). With a modded PS3 (using CFW or HEN), you can bypass the official store restrictions and convert your personal PS2 game backups into these same digital packages. The main advantage is convenience: once installed, the game icon appears directly on your PS3's XMB (XrossMediaBar) home menu. You can launch it with a single click, just like any official PS3 game.