I apologize if it's been beaten to death, or if its a stupid question, or both.....but do I have to buy a special adapter to get online, or just plug in a phone line and run with it?

ya need to buy the ps2 network adapter, think it retails for 30 bucks..

buy a network adapter which includes both dialup and broadband hookups... not many games to play except maybe socom

socom (the best online game imho)
midnight club II (a close second)
twisted metal online
football, basketball games
atv off road fury 2
tribes (like socom, but more futuristic and no headset)

there's more i missed, but it's definately worth it to buy the adapter if you have a high speed connection, dial up, i'd think twice about it...

don't forget amplitude, i loved frequency and the online play in this one is better than the original. it was only $18.88 at target, not sure if it still is

How do games/system perform using dial-up connection. Is it not even worth it due to the lag?

well, i originally tried ATV with dial up, but you're usually limited in what you can do. for example, less players can race at once on dialup than on broadband. Did it lag? yeah a bit..

best route is broadband, that way you have no restrictions on the whole online experience.