Over 70 percent of PAL PS2 games should work on PS3 consoles with software emulation, but not necessarily without issue...
As the PlayStation 3's European launch draws near, Sony Computer Entertainment Europe has taken the time to launch a new site which lists the status of backwards compatibility for PAL PlayStation and PlayStation 2 games on the next-gen console. Backwards compatibility has re-emerged as a buzzword for the PS3 ever since SCE confirmed the 60GB models allotted for PAL release would be losing hardware emulation for PS2, in lieu of a new software solution. Unfortunately, the revised hardware design has the effect of potentially hindering backwards compatibility on the new PAL PS3 models.
Though the promise of backwards compatibility being ultimately diminished stings somewhat in principle, SCE still guarantees that approximately 1782 of the total 2451 PS2 games (or around 72 percent) released in PAL regions thus far will work on the PS3. However, this drops to around 61 percent if we were to limit the number of games to those which work with "no known issue". This news could be pertinent to potential PS3 owners outside of Europe as well, because SCE has stated that the move toward software PS2 emulation would be planned for all future PS3 consoles.
Joystiq has posted graphical breakdowns of the known extent of backwards compatibility for PS and PS2 games here.