Yes. Usually you'll need a VIDEO_TS (and AUDIO_TS, usually empty) in the root directory of the DVD. The VIDEO_TS folder will contain the IFO, VOB, etc files created by DVDShrink.
I actually usually just tell the burner program (have only used Nero very limited though) that it's a DVD data disc, and it plays in all my settops. Haven't tried the PS2 yet though.