yes
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You need a program called grandeu to make modded weapons on dungeon defenders PS3.
No.
Xbox 360: Yes. A modded firmware is available for the DVD drive allowing a mod with no extra physical items required. Wii: Yes. PS3: No.
A MOD for a games console basically is a modicfication to a game, an add-on if you like. You can hack games to add what you like to suit you. GrandTheftAuto is the biggest MODDED game on PS3. People add new cars etc to the popular game. Game makers are trying to stop people from MODDING/HACKING games.
An easy way to find out if your PS2 is modded is to put in a game that has been pirated. If it plays then the PS2 has been modified.