Yes.
You can purchase replacement boards for the network adaptor to change IDE into SATA.
There are also 3rd party network adaptors that already have the SATA connection but usually don't have the network capabilities (no RJ45).
If you are using the ps2 as is with no exploit, then you can only use the 40gb Sony IDA HDD that came with the kit (or similar... I can't remember the limitation). But with an exploited system, you can do all these changes like sata conversions and using HDDs with much larger capacity.