PS1 emulation is way too simple to require additional hardware , it's all done in software on PS3.

Also, all the PS1 Classics that are available for sale on PSN are just CD-images of the actual PS1 games, they don't have a single changed line of code in them. The PS3 run these through its emulator too.

But again, the emulator looks terrible and lacks a ton of features that ePSXe on PC can do, and even the PS2 emulator can make the games look prettier than the PS3 can.