How do I think it works? Because I have done it! And I have told a bunch of friends around here and they have all had success too!
I only have, SSX and Gran Turismo 3: A-spec right now. But I have tested, Devil May Cry, Timesplitters, and several DVD\'s and noticed everything is smoother!
I with the resolution setting, games looked alot cleaner and smoother. The DVD movies had a cleaner look too. (I even noticed a difference in the grit-fest "Saving Private Ryan".)
The cord thing was instant fix, If your cord is kinked up, or still got folds in it cuz it was just bought, (like mine) than straightening it out should smooth things up for you. *If it has to have make a turn between the TV and PS2, (again like mine) make it wide and smooth as possible!* No sharp 90 degree turns!
A good place to really see the changes is the character selection screen of SSX. (Or where I first noticed it, the top of the crowd stands in the fly-by of Snow Dream.)
The changes were definately noticable in the other games too.