You got a couple of options - the older 80GB's, a 60GB, and a 20 GB.

Your best bet is to get a refurbished model, and Gamestop actually has some amazing deals for what you're looking for (imagine that)

Gamestop PS3's

The 80 GB with 4 USB ports and Backwards compatibility is $280, that's actually a pretty good deal, but the PS2 emulation is done through software, so it's not as reliable as it is on:

The 60GB model, which has 3 different card readers, 4 USB ports, and full hardware Backwards Compatibility for $330. This is the best PS3 model Sony has made thus far. It's $30 more than a Slim, but I'd imagine you'd be willing to pay $30 for Backwards Compatibility. Also, it's hardware, so it'll be like your games are actually running on a ps2, of course you have extra options like smoothing.

Another $279 deal is the 20GB, obviously it's somewhat of a problem since I believe it doesn't have WiFi, and since a lot of games have installs you'd be running out of space fast. The good news is it's super, super easy to replace hard drives on a ps3, you can buy a lap top hard drive off a site like Newegg.com - Computer Parts, PC Components, Laptop Computers, Digital Cameras and more! and it's super cheap for quite a large amount of storage.

Also, if you're using an HDTV, I would recommend getting a really cheap HDMI cable off newegg as well, just thought I'd put that out there.