Until version SCPH-550x the audio is better, after that they used a cheaper DAC, but for today's standard it would be much better to just add a Toslink output on it.
The difference isn't that much through, on older DAC is warmer, basically just that. Keep in mind PSX is limited to 32kHz 99% of time. It only outputs 44.1kHz when you're listen to a Audio CD (CD-DA).
As for video, any version is fine, as long you use RGB.
No system can emulate a 100% PSX, not even fat PS2. On ps3 is even worse.
SCPH-39001 v7 GH-022 NTSC U/C, Matrix Infinity v1.93 (installed by me), HDLoader v0.8c, Network Adapter (with SATA mod), 1TB SATA, SMS v2.9R4, VGA and GameLink 400 cables.
DEV1: uLaunchELF v4.42b / DEV2: CodeBreaker 10.1. Got PSX and PS3 too.
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