What is a Modified or Chipped Playstation?
Modified or Chipped is a term used to describe a playstation (also applies to other consoles) that has been adapted by a hardward modification to play imported and / or copied games. Basically a small circuit board is used to by-pass the copyright & region sensing part of the consoles hardware.
This isnt always related with software piracy as, for example, you buy some American Playstation games and bring them home to the UK they wont play on a normal UK playstation as they are a different region. A chipped playstation would let you play them.
Also if you have bought a game and somehow damaged the cd a backup copy would be ideal as you dont have to buy the game again! A chipped Playstation would let you play a backed up copy where as a normal one will not.
If you choose to download and play pirated games thats up to you!
Boot CD's / Discs
For the Playstation 1 (or PsOne) you can buy a "boot cd" which will act in the same way a "chip" would - it lets you play other regions and backups. The advantage in this is that your system is not opened and tampered with so doesnt void any warrenty you would have. In my experience the boot cd doesnt work as well as the hardware modification but its another option.
The main commercially availble Boot Disc is called "PS-X-Change" (shown below) which has a version 2 out now. This will work with both the larger grey Playstation 1 and the small white PSone.
A new product which is designed for the Playstation 1 and PS2 (to play other region PS1 games or PS1 copies on your PS2) is called "Breaker Pro" (shown below). This includes a swap card for the PS2 to allow you to open the cd drawer to swap the boot disk for your other region (or backed up) Playstation 1 game.
You can download some Playstation "boot cd's" here: http://www.megagames.com/psx/psx_utils_bootcd.shtml
If you want to download and burn Playstation games to play in a modified console (or on a pc via an emulator program) nearly every PS1 game is available to download here:
I would suggest you get the cd burning program called Alcohol 120% it has settings for burning playstation games and it burns most formats.
Modified PSone with Sony LCD screen
If you get a PSone console that is chipped and want to use it with the Sony PSone screen (shown below) you will find the screen "rolls" until the game starts. This is because the screen only supports UK 50mhz and as the modification lets you play all regions this effects the screen slightly. You wont be able to play USA or any NTSC playstation games on the screen as it will roll continually because USA and NTSC games run at 60mhz which the screen doesnt support.
Finding a Chipped Playstation
eBay do not allow the sale of chipped or modified playstations but they are still occassionally listed. To find a chipped Playstation for sale on eBay I would first do the obvious and search on "chipped playstation" or "modified playstation " as well as trying ps1, psone, playstation 1, and psx in the search. If no joy tick the "search titles and content" box and search again. Also look for auctions that say "special", "adapted", "region free" or "professional" console and are being sold with lots of games. If someone reports a chipped console being sold to eBay they will cancel the auction so I suggest you contact the seller asap to express an interest (not that I condone buying outside of eBay).
Remember - backup your games and play the backups - then if you damage the backup you havent lost everything!