Wow. We just got N64 working and we're already...somewhere with PlayStation. Nice. So when does XBox360 speedrunning start? :)
As for loading times, I could be dead wrong about this but I figured I'd chime in since as far as games from PC go, I've run the complete gamut of load times and have some understanding of how they work. I've played games from floppies, I've played games from hard drives, I've played games from CDs, and I've even played games from virtual RAM drives, which is a hell of a lot of fun. But I digress. From what I understand you have a "start the now loading screen" sequence, the loading itself, and the "OK the game's loaded now, get going" sequence. For argument's sake, let's say "start loading screen" is fading into the "Now Loading" screen and the "now load the game" sequence is fading OUT of this screen. Now the middle sequence, the loading, may, depending on how the game/console is programmed, only start once the "Now Loading" screen has fully faded in, or it may start earlier (the fade in is done by the system and its RAM, leaving the drive to do other things like start loading the game). However, what happens is that the game makes frequent (for argument's sake, let's say every frame) checks as to whether the game is loaded yet or not, but it WILL NOT start these checks until after the "Now Loading" screen has fully faded in. So basically, if we were playing this game off of RAM in an emulator, the "Now Loading" Screen would fade in and then IMMEDIATELY fade out. Naturally, I could be wrong about this, although I will bet money that a properly-coded emulator designed for speedrunning will give completely repeatable results just like the emulators we have working with speedruns now. Don't forget that many cartridge-based console games do technically have load times under certain circumstances, and they work (FDS ahoy). One cartridge game I know has significant "loading" is "Mace: The Dark Ages" for N64 as the console itself doesn't have enough memory to load everyone's character model at once on the fighter select screen, forcing the game to load whenever you move the cursor to a new fighter (it creates a very apparent pause on a real console if you pay attention to the blinking cursor; not sure about on an emulator). Newer fighting games still apply similar strategies (Soul Calibur 2, at least on PS2, only loads silhouettes initially before loading the actual model, and you can hear the PS2's drive work even though there's no "on-screen" pause). And, of course, some games stream data. FMVs, of course, do this, as do voice (DDR songs as well, for example) and, of course, CD audio tracks.
As for "OMG UNAUTHENTIC" dissenters, keep in mind that the PS2 also allows for doubling the PS1 game load speed. It's possible that certain emulators may limit data intake speed to ensure compatibility in case a game is dependent on loading lag (although I think only early, mostly-forgettable PS1 games would have this problem; I think everything from FFVII on should be fine if you jack up the speed), but I think it's best we get something that actually works before we start having a meaningless fight. Having this kind of fight now is akin to people taking stances now over their position on brain transplants. Once someone who actually knows what the realities of the PS1's functionalities are (and isn't just guessing like I'm doing) and actually reliably tests these things out in a recording-capable PS1 emulator, then we can find out the best way of handling things. Let's not put the cart in front of the horse, as they say.
One last thing: I'm fairly sure tampering with the CD is a no-no speedrun-wise for the same reasons that "nudging" a cartridge while playing is a no-no for them as well (or baddumps, for that matter). If any speedrunning is going to happen it's going to require verified versions of a game and the emulator is going to have to be able to reliably acquire the information for the game and not just "gloss over" it as the PSX is designed to be able to do to a certain degree. Runners themselves will likely be working off CD images on their hard drive; constant loading and re-loading would wreck the be-jesus out of a CD drive. Playback may be doable off a CD, although I'm sure that anyone having trouble with playback won't get much support until (s)he dumps the CD to an HD image. Phew! OK, I'm done.