The PS2 is capable of multiple forms of analogue and digital surround sound.
Most surround-capable PS2 titles made use of Dolby's newer Pro Logic II standard, which extrapolated a 5.1 surround mix from two audio channels. This time, each of the two stereo channels carries an inverted-phase signal that become the surround-left and surround-right, with the center channel being made up of any sounds that are mono (panned dead center between left and right), such as dialogue in cutscenes. The ".1" in "5.1" refers to the sub-woofer, where all sounds below a certain frequency are routed to. Many PS2 games have a Surround option in their audio settings, but some only list "Mono" or "Stereo", despite boasting the Dolby Pro Logic II logo on the packaging or disc label. Generally in this case, the stereo option serves double duty as both a stereo signal and a 5.1 Pro Logic II signal when decoded appropriately.
All models of PS2 are capable of passing their audio signal in an analogue format over standard RCA cables or a SCART connector, but are also quipped with a TOSLINK / SP/DIF port on the back for an optical audio cable for purely digital sound. To switch between the two, go into the console's native settings menu and make the appropriate selection under audio.
Some modern AV Receivers are quietly dropping compatibility with older surround formats, but others are holding strong. It is recommended to research the surround format capabilities of a given receiver before purchasing new.