You can see various PlayStation ROMS for games such as the survival horror classic Resident Evil 2, and others.
Apparently the software running the PlayStation emulator is called ROM Buddy. However, it's unlikely that this is how the final product will run, as we can probably expect some sort of Sony solution (such as PlayStation Network) to be introduced to the phone. It's also worth noting that this is not the same device as the also-rumored PSP2, which is going to be it's own handheld gaming machine.
Still, it will be interesting to see how well a phone launched as a gaming device will do.