As part of my project I built an IR sniffer and, I see what is happening with the arrow keys. The genuine sony PS2 remote sends the arrow sequence for both the Game controller and the generic Sony DVD, back to back. I can't imagine how anybody would get lucky enough to catch only the correct one. It's all down to luck since if you hold it down long enough to make sure you get the right code, you are in danger of either getting the wrong one, both, or more than 1 of a code. Since this looks like a new keypress, it would cause the arrow key learned to either, do nothing, work, or make multiple moves. Learning in raw mode would be extremely difficult. Sounds like some of us are very lucky!
With the built-in harmony commands, it only sends the DVD arrow codes.
The dongle I built works with the Harmony 1000 right out of the box. In fact, I even was able to enter Playstation 3 as the device and selected the "Game with built-in DVD". Works like a champ with no learning. It also works flawlessly with the newer PS2 IR remotes. It wasn't easy but... it's all working now.