>>1020276
Let's get started:
PS1 used "Gouraud" shading not flat shading.
PS2 also used Gouraud shading.
No normal maps or bump mapping was used.
Environment lighting was baked during the pre-pass and light maps were used to light up the world.

Lighting + HDR + Screen space effects = PS2 "look"
HDR gives you bloom, atmosphere, environmental scattering.
Screen Space effects gives you, motion blur, depth of field, strobes, lens flares, etc.

Dynamic lighting is really simple, you have a set of directional lights (3 in MGS2/3) for rendering a model, the world has fake point lights placed "manually" by the artists, the 3 closest point lights to snake are chosen, gets converted to directional light, and the model is lit. This includes wildlife, soldiers, enemies, etc

PS2/XBOX and early PS3/XBOX360 followed the SEGA philosophy of 3D video game graphics. SEGA treats 3D video games, like a painting. Realism is never a goal in "video game" unless it adds mechanical depth. Volumetric Lights in MGS3 was implemented as transparent textures and it looks really good. You can even animate them to simulate dust particles without any performance hit, meanwhile the same thing in AAA games halves your framerate.

TLDR: If you want PS2 style graphics, focus on HDR and Screen Space Effects. This will all you to implement effects like light scattering. Look at picrel, the atmosphere is completely dynamic, it changes as you move closer or further away from an area.
Here's the paper: https://web.archive.org/web/20060309005347/http://www2.ati.com/developer/gdc/GDC02_HoffmanPreetham.pdf

For some reason, most ATI (now AMD) demos and GDC talks presented during the PS2/XBOX era are wiped off. Look for book released between 1995-2006 and you will learn most of it.