Boy I'm really gonna quad post in my own thread huh?
So I spent a few hours testing things and here's what I can say.
PS1 games: as stated, Sony America thankfully stuck with the NTSC versions for this region (guess I'll update ya'll later on if Europe and Australia get the 50Hz PAL versions). Stuff like Ape Escape, Resident Evil, and Syphon Filter feel exactly as I remember them, running pretty smoothly though remember they are still old PS1 games so some mild jank as a result of simply being old 3D games is to be expected. Also it was interesting to play the PS1 version of Toy Story 2 (still surprised that's even a part of the service) as I grew up with the N64 version as a kid, and the game feels both familiar and different since the PS1 version had some advantages over the N64 release (for one those famous PS1 compressed FMVs of clips of the movie, and music I don't remember since PS1 discs could hold more sound files than an N64 cart).
PS2 games: Doesn't seem like much has been done here yet. Games that already ran fine on the PS5 still run pretty much the same (like the Jak and Daxter series and Resident Evil: Code Veronica X), but games that worked fine on PS4 but suffer emulation issues on PS5 still have those issues (like Primal having some weird texture glitches).
PS3 streaming: now one very important thing I do need to note is I have a gigabit fiber optic internet connection, and my PS5 is connected to my modem via ethernet. As such what I experienced when streaming PS3 games may not represent everyone, especially people with slower internet. But that said I will say that for ME and my internet, I'm genuinely very surprised that the streaming works… perfectly fine! I tested out various games of different genres and I can say that if there is any input delay it was very negligible as I can say it really does feel like my button presses are being recognized just as well as games running on native hardware.
Now one big thing that has to be noted about the PS3 games is it looks like no enhancements were made to how the games look or run, they're still gonna run at the same resolutions and framerates they would on real PS3s. First game I tested was God of War HD (aside: I forgot Bluepoint did the PS3 remasters of GoW1 and 2, their history with Sony goes back a little further than I remembered). This was a good one to start with since it's an action game that requires good timing, especially since it also has QTEs. The game appears to run at something that may between 720 and 1080, and the framerate was a smooth 60 FPS throughout my testing session. Next up I tested Red Dead Redemption 1, a more demanding open world game. This is why I noted the whole "they still look and run like they did on original hardware" as RDR looks like it's very much a game that's struggling to run at 720p, and it dips below 30 FPS quite often (especially in any areas with multiple NPCs). Third I tested the Resident Evil Chronicles games (the rail shooter spin-offs that were first on Wii but got PS3 ports), a good one to check as they're on-rails shooters that require good timing. Again, ran perfectly fine. Both seem to be locked at 30 FPS and maintain a steady 30 throughout, the resolution looks like it's 720p but it didn't look like it ever dipped below that, and my aiming and shooting felt on point too. I also ran quick tests in games like RAGE and The Darkness, two games I played a lot on the Xbox 360 over a decade ago, and while RAGE does seem to have some more noticeable dips than its 360 counterpart, The Darkness really didn't feel that much different from the 360 release.
As of right now probably my main gripe with the new PS Plus is it does currently sport some odd omissions when it comes to the "classic games" lineup. Like while all the PS3 Ratchet and Clank games are present, none of the PS2 or PSP games are. Heck not even the PS3 remasters of them are there even though the PS3 remasters of God of War 1 and 2 are present. The PS1 library probably needs a few more months of new releases kinda like how the N64 NSO library could have used more games when it launched. Activision needs to give the okay for the original PS1 versions of the Crash and Spyro games for one, and I'm sure Embracer will be cool with putting the old Tomb Raiders and Legacy of Kain on there. The PS1 and 2 Final Fantasy games are actually a part of this new PS Plus, mainly through their remasters, so they're at least accounted for. I'm also hoping we do eventually see stuff like Xenogears (though IMO Square needs to sell the IP to Nintendo so Monolith Soft can do a remake), Vagrant Story, the entire Metal Gear series, Alundra, Tomba, and Silent Hill (and if SH2 and 3 are added to the service please let it be the PS2 originals through emulation and not the poor remasters from the PS3).
PS2 also needs some more love with games that were already available on PS4 needing their emulation improved when played on PS5, and new games in general as IIRC I feel like the Jak and Daxter series were the last new PS2 games to be added to PSN altogether. Hopefully with this new PS Plus tier Sony will actually try and put out some more classic PS2 games like Ratchet and Clank (as I already said), the Sly Cooper series, Tales of the Abyss, The SSX games if we're really lucky, and the SMT games lacking a remaster.