You insert plug a supported USB device into the USB port (they only fit one way, so you can't screw it up). What devices are supported will depend on the individual game.
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No, only old PS3 Game consoles with 4 USB ports can play some PS2 game titles.
The USB ports on the PlayStation 2 are multi-purpose, and could in theory be used for any peripheral that a game wanted. The most common uses are for the EyeToy, the PlayStation 2 headset, and the Guncon II (a light gun). Some games also support saving screenshots to a USB Flash drive or printing to a USB printer. Plugging in an MP3 player or iPod via USB cable can also be used to charge it while you play the playstation.
only 2 usb ports on the front
Only the ones with 4 USB ports. PS3 consoles with 2 USB ports are not Backward Compatible no matter what size the harddrive is.
Only select PS1 titles can be played on any 2 USB port PS3. There are only 2 USB ports on all the PS3 slim modes, any 80 GB fat PS3 models produced after August 2008 or the 40 GB PS3