The Retron 5 did indeed release, but from the sounds of it, Hyperkin didn't release nearly enough to meet preorders. I preordered through a local store and I'm still awaiting fulfillment on the gray console. The black console won't be released until September, maybe..but that was only announced within the last few weeks, I think. Maybe around the time they raised the price by $40?
It can kinda be considered vapourware, though, maybe, because I think the Retron 4 that was never released just sort of morphed into the Retron 5 after that one was delayed for nearly a year, too.
With software backward compatibility for PS3 (and 360), you can only play games that have been specifically coded to work via the emulator. I think around 60% of PS2 games work on PS3 via software BC, whereas around 99% work via hardware BC.