The PS3's backwords compacity is only for the PS2 right?

Just wondering when I do upgrade to the PS3 if i'll have to keep the PS2 around to play my PS1 favorites.

It has both PS1 and PS2. If you get a 60GB PS3, you shouldn't have much of any problems with backwards compatibility. If you get a newer version that has EE removed (80GB), they have a list online of titles that tells you about issues for any title you may have.

I'm sure someone has the link. There's one for US and EU.

I'm pretty sure that the software emulation used in the ps3 has 99% BC of ps1 titles. It's only the ps2 titles that they're having trouble with.

US: http://www.us.playstation.com/Support/CompatibleStatus

EU: http://faq.eu.playstation.com/bc/

I thought I heard that even the 20/60 GB US and Japanese P$3's (i.e., hardware-based compatibility) had some  issues with certain PS2 games. 

Ah good. Thanks.