snowkatt: they are running on a emulation layer on better hardware of an hd which is 20 times faster then the original 2 speed cd rom could ever hope to be ;p
The problem is that you often can't boost the loading speed for old emulated games too much. I don't know if it's the emulated hardware not keeping up with the drive or how the loading procedures were written but at least some emulated games will crash or act up otherwise if the emulated drive speed is boosted too much. I guess that's why the loading times of the PSOne classics aren't that much shorter than on the original console despite the hardware being capable of much more.
But still, this reminds me: why the hell are HDDs in consoles so ridiculously slow? I inserted my netbook's HDD into my PS3 soon after I got the latter, it's a regular HDD like any other, when still using it in my netbook I used to copy DVD rips onto it and it it took less than a minute to write almost a gigabyte. In the PS3 it takes like twenty seconds to write a simple save or configuration file which is like several dozens of kilobytes, no more than half a megabyte.