PS3 Backwards Compatibility help? Easy 10 points?

Ok so my PS3 60gb just broke. I got refunded and could go buy a Slim but i love the backwards compatibility. Well on my friends 40gb phat, it had an add on called PS2 System Data. It says it wont work on this model but what does it do? Does it allow B/C on the slim? and btw the only PS2 games I really need to play are Okami, the Kingdom Hearts games and some others. So can anyone tell me the point of it if any? thanks for any good feedback!