This is a HD Loader 0.8c compilation that contains a shrunk HD Loader (600KB), Independence Compiler 3.0 (which itself contains boot.elf), HDL server and hdl dumb, all the software you need to play games off HDD on your PS2!
As for the hardware you'll need:
Fat PS2 (original, non-slim)
PS2 Network Adapter (I suggest ebay)
HDD (3½ inch, 40-250GB)
Original Playstation One game
Crossover cable (to copy games from your computer to your PS2, no normal network cable, HAS to be crossover)
A way to boot burned CD-ROMs, like Swap Magic or any chip (since this is needed only once and to copy boot.elf and hd loader to memory card, you can use any PS2, a friend's maybe)
Run Independence compiler, follow instructions and don't forget to include HDL08c an hdld_svr (if you plan to transfer ISOs over a network) ELF files, add a PS1 disc ID, select that your PS2 is on a network and select the proper region (PAL = Europe, NTSC = USA). Boot.elf will be included automatically. Make CD image, burn it and run it on a PS2 with the memory card you plan to use inserted into Slot 1.
After you're done, insert the PS1 game you previously determined to use and boot.elf should start.
Configure boot.elf to run HDL08c.ELF default and hdld_svr.ELF on a press of a certain button. Both are located on your Slot 1 memory card in the SYSTEM folder.
To install games, you can either use originals (or copies if you have a chip) and install them from the HD Loader interface or do it over a network. Connect your PS2 and your computer with a crossover cable and run hdld_svr.elf on your PS2. On your PC, go Control Panel > Network Connections > right click Local Area Connection and select Properties > select Internet Protocol (TCP/IP) then properties > select "Use the following IP address and write 192.168.0.1 for IP and 255.255.255.0 for subnet mask > OK > OK.
Now run hdl_dumb.exe and click attach. You can now transfer gamer over the network. :) When you're done, change the Internet Protocol properties back to "Obtain an IP address automatically" and reconnect the cables so you can use the Internet.
Note: For a compatibility list (compatibility is very high, BTW), see http://www.ps2hd.com/list/ (in HDL, press Select when on a game to choose among compatibility modes, Mode 3 is the third listed etc)
Note2: Thanks to ZeroX and other guys and girls over at psx-scene.com
Hope this is all you need. Good luck!
This text is also included in the INSTRUCTIONS_ON_USE text file within the torrent.