Playstation What Is The Deal With The Backwards Compatibility Of The Playstation 3?

What is the deal with the backwards compatibility of the Playstation 3? - playstation

I've heard that the Playstation 3 systems that are currently in production are not compatible with the original PlayStation and PlayStation 2 games. I have also heard that you can install the software to add backwards compatibility, then I heard others refute this claim. What's the deal? I want as much detail as possible!