My bad on the confusion thing... Yes, my V3 does play DVD-RW movies. So that shouldn't be the prob. As for the unmodded ps2 thing, I got my info from here:
http://forums.afterdawn.com/thread_view.cfm/15105. According to these guys, you can do it. I don't know what to believe! I will more than likely buy the Swap Magic discs tho... is there any way to use cheat codes from the GS2, as well as use the swap magic discs?