It's an emulator! That plays old LucasArts adventure games, along with a handful of other similar titles. You'll still need the actual disks/CD, of course. Unless you want to play Beneath a Steel Sky, because Revolution Software provided the source code. Oh, and Beneath a Steel Sky is available as a free download from the site. The emulator also supports Simon the Sorceror 1 & 2, Broken Sword, and Flight of the Amazon Queen, which is also freely available thanks to John Passfield and Steven Stamatiadis.
Amazon has a list of popular headsets here. I ended up buying a bluetooth headset myself, figuring I'd get enough use of it between the PS3 and my cell phone, since there all kinds of hands free laws going into effect around here. It's kinda worked out.