PS1 games will not work with HDLoader. The IOP which used to run the hdd modules, is also used to run PS1 games. It cannot do both tasks at the same time.
You could make a PS1 emulator that ran off the EE. Then you could have a hdloader for PS1 games but I really doubt the PS1 emulation would be better than Sony's.
Let's talk about Playstation games on the Playstation 2 and HDLoader
Re: Let's talk about Playstation games on the Playstation 2 and HDLoader