Those crazy hackers at ZodTTD have been able to get the iPhone to successfully emulate a PSOne. So far the program is only in its beta release and of course, only available for jail broken iPhones.
Apparently the authors say that the download will be available via Installer.app later, but currently it is only available via manual download. For more information, be sure to read the ZodTTD forums and FAQs.
Enjoy and Merry Xmas!
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