although that seems like it would work, it won't, some games can only be burned onto cds. A good rule of thumb is if the game has good graphics, then its a dvd based game. the only games i know that are cd based are poker games.
You don't just have to limit it to a modchip, there are other sorts of mods out there. Check out - http://www.swapmagic3.com
PS2s tend to be picky with media, so I say go for some DVD-R Ritek G05's.
DVD-based PS2 Games.
Download DVD Decrypter and install it, then open it.
choose MODE>ISO>READ and choose a place to save the game then click the image, then when thats finished, choose
MODE>ISO>WRITE. Insert some good decent media, and burn at a slow and supported speed. 1x,2x etc. (Some media like Piodata Ritek's support burning at 4x + 8x and most of the time, you can burn at 4x with these and still get a nice backup with no errors/lags/skips etc.)
