PS3 does playing a psx iso instead of a bin/cue work?

Both are binary the same, just different extension name in filename, so the answer is yes. That's in technically meaning. It is just common that images with blocks larger than 2048 and those with CCDA, are named *.bin, while *.iso staying with no multi tracks, in such case, the answer is no. ;)

However, WMM will not mount image which have separated tracks, all must be merged and written into *.cue.
 
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