well, there's not really much in terms of homebrew, but you can at least play xvid and mp3 with sms from external.
Don't try to load backups from your external though, PS2 USB port is 1.1, so it's around 1/5th slower than loading from DVD. You'll get lags and such while playing so IMO it's not worth it. Actually, the best option for a while now has been internal HDD, as it loads faster than even DVDs...The only moot point is that you need a network adapter and a compatible IDE HDD
Don't try to load backups from your external though, PS2 USB port is 1.1, so it's around 1/5th slower than loading from DVD. You'll get lags and such while playing so IMO it's not worth it. Actually, the best option for a while now has been internal HDD, as it loads faster than even DVDs...The only moot point is that you need a network adapter and a compatible IDE HDD