Modding PS3

You can only mod a PS3 that can is on FW 3.55 - you can't downgrade a PS3 to below its factory FW (so if a PS3 was sold with 3.70 already on it you can't use any firmware lower than that, even with a flasher).
All fat models are downgradable, and slim models: 2XXX and early 25XX models are. (if you have a PS3 model 25XX use Min Version Checker: https://github.com/downloads/baileyscream/Ultimate-Fool-Proof-Guide--Ps3-Hardware-Downgrading-files/MinVerChk.rar)

If you have a PS3 that has been on FW 3.55 or lower, but is now on an OFW higher than 3.55, you have to downgrade it using a flasher they run about $50-100.
See which flasher you can use here: http://ps3devwiki.com/wiki/Hardware_flashing#Comparison

Tuts:
Fool Proof Guide: http://www.ps3hax.net/showthread.php?t=39766
Using E3 flasher: http://www.ps3hax.net/showthread.php?t=33989

Once you're on FW 3.55, you can install CFW. From there you can either stay on CFW 3.55 and use modified patches to play new games, but you'll only have limited access to PSN - or, and here's what you should do, you can upgrade from CFW 3.55 to CFW 4.3X and play any new releases and have access to PSN.

To install CFW 4.30 from FW 3.55, follow this: http://www.ps3hax.net/2013/02/tutorial-how-to-install-4-30-ps3-cfw-from-3-55-cfw/

You can - and will if you cheat - get banned from PSN if you use CFW on it, but there are a couple ways to unban yourself (you have to use someone else's console ID - if you get that ID banned too, then you ban their console..).

As for emulators, I'd try RetroArch's PS3 build.