It was a fad a while ago and a topic of big discussion on all the audio boards. I guess SONY used high quality parts in the original PSX and someone recently discovered that it's an audiophile performer. I've seen lots of photos on the net of cutting edge tube systems costing many, many thousands of dollars, and there's this little Playstation 1 sitting in the cherry rack along with the rest of the gear.
Here's an article on the subject. This is kinda like
the $30 Sonic Sense T-Amp craze that happened a couple of years ago. People were replacing their $6,000 amps with this $30 digital jobby.
To the OP: I still use mine for 3 things:
1) Playing PSX games. It's still good for that. I usually play via ePSXe on my cabinet now, but I still use the real hardware for the games that demand an original controller (MGS, Siphon Filter, etc.). I never bought a PS2 or PS3 so the PS1 is useful to me.
2)
IMBNES which is a really nice emulator. It's nice to have to have a full CD-R of NES ROMs on demand
3) CD Player. Hey, it's audiophile baby.
-pmc