While there are a myriad of different models, the important ones are 20GB and 60GB are hardware based compatible with playstation 2 games. The early 80GB models have software based PS2 emulation. This results in a few graphical and sound errors, but supposedly has a 98% playability. If you want to upgrade your harddrive, it's an easy procedure. Be careful, the blue screw is very very easy to strip.
All Playstation 3 Games are region free, but PS2 and PS1 games are region-locked. However Playstation 1 games can be downloaded from any region's Playstation Network. In recent years, many retail PS3 games have also been made available digitally.
Sony promised that the PS3 would have a 10-year lifespan, only to announce the non-backwards-compatible PS4 after less than seven. Promises, promises.