I have an ISo file for valkyrie Profile 2, I opened it and uncompressed it with winrar, then I burned it to a blank DVD+R disk. The game boots up like normal, but the games display is distorted on my TV screen and is in black and white. Am I doing something wrong? Or is it the ISO file itself?
It's indeed because your .iso file is wrong format for your TV. So if you're in NTSC area, you have to download some PAL to NTSC converter.
This should solve your problem. Unpack the program to your computer and use it to patch the .iso file before burning. This doesn't require any applications installed to your PS2, just use it as normal backup.
Ofc this patcher doesn't work with every game, but it should help a bit at least.
I think changing to RGB cable could also solve the problem (works with NTSC->PAL, so i assume it's the same other way around, too.)
And then i've also heard that is some modchip install instructions there's also mentioned some soldering point which does the same trick... Messiah -modchip instructions, for one, have this mentioned. But mind that i've never tried it and can't guarantee that your PS2 will still work after it...