From GameSpot:
“The European PS3s will be designed differently, meaning that a “new combination of hardware and software emulation” will enable the new PS3s to be compatible with only a “limited range” of PS2 titles and a “broad range” of original PlayStation games.”
“A Sony spokesperson told Reuters that “the backwards compatibility is not going to be as good as the US and Japan models.”
The article goes on to state that the emphasis is on creating new titles with the technology rather than spending resources on ensuring perfect compatibility. Firmware updates are expected to correct some issues.