Let's look at something here for a Sec:
-FM MODULATOR-
I wanted to point out that FM modulators won't give the sound quality that you might want from your PS2. There is a MUCH BETTER alternative.

Check this out:
http://www.audiocontrol.com/caraudio.htm
Not sure if you've heard of these guys or not, but AudioControl makes some GOOD "Audio Controllable" devices. I personally purchased the AudioControl Four.1. and this device kicks some serious butt. Here's why: It has AUXILIARY INPUTS, which means, you can plug in some separate audio RCA Cables from another device (PSX, Neo MP3 Player, Nintendo, Video/DVD, etc.) and you can switch back and forth via the switch on the front of the Four.1 that says "AUX."
Not only does this allow you the ability to hook up multiple devices, but you can also CONTROL the audio(subs, mids, and highs) to a pretty good extent.
FM Modulators will not give the kind of quality that something hooked up via RCA's and cables can produce. I am controlling my subs this way and I plan to add some type of AUXILIARY device such as a VCR, DVD, Nintendo, or PSX, but I'm not quite sure yet, which.
Well, I hope this helped out a little, and good luck on choosing where to go next.
-Mike