Images of new technology patented by Sony illustrate a method by which the PS3's Cell Processor can be used to emulate the PS2's Emotion Engine code.
The patent describes the tech as "an example of a host system based on a cell processor that may be configured to emulate the target system." The patent's wording and the appearance of the Emotion Engine and Cell Processor in the images leave little possibility of anything other than PS2 emulation on the PS3. It's unclear if this emulation includes PS2 disc support or if it will be geared towards potential PS2 title downloads.
Siliconera.com describes Sony's process as: "[...] a way to translate instructions from an Emotion Engine chip into chunks that can be referenced." This new plan for emulation differs from early backwards compatible PS3 models in that the originals actually included the Emotion Engine hardware in the console. Sony's emulation patent is more in line with the Xbox 360's (sometimes faulty) emulation of previous gen titles.
While the emulator is no replacement for the hardware itself, Sony is still selling the PS2 and would surely rather make cash off of Emotion Engine chipset sales rather than just giving them away with the PS3. Either way, this is potentially great news for current and future PS3 owners, as the lack of backwards compatibility has consistently drawn major criticism from the gaming community.