The PS1/PS2 cdrom drive is looking for copy protection information at the beginning of the CD. If the copy protection information isn't there, the PS1/PS2 will reject the CD and not allow it to be played.
This can be overcome with a modchip. The modchip just makes the PS1/PS2 read the copy protection, of the backup to be considered "good" versus "bad" as without the modchip. You can get past these with the "swap" trick because you will use an original PS1/PS2 game to read the beginning of the CD, then the rest of the loading will be fine.
Software that is used to make the dupes cannot copy the copy protection information. They can, however, clone the areas, and still make them readable to the PS1/PS2 laser. The PS1/PS2 drive will know these cds aren't originals because only originals have the copy protection information on them. If someone could find a way to 100% clone the copy protection, and put that onto a CDR writing software, Sony would come on them pretty hard with their lawyers.
vash