this is what I use:
[Release] PS2 Classics Manager v1.02 (April 11, 2013)(CFW 4.XX)(UPDATE)
install this on your PS3, stick PS2 Iso's into your USB under this folder: X:/PS2iso/game.iso
then start ps2 classics manager, and scroll through the menu selection and you SHOULD find your PS2 iso there, the software will encrypt it automatically.
one thing you need to make sure of is to make sure you've created and assigned 2 memory cards from the "PS2 Save Utility" option in the game column of your XMB.
i've been running ps2 games via ps2 classics manager for a while now, and every game i've tried so far works great.