stands for Compressed Hunks of Data . It was originally developed by the MAME (Multiple Arcade Machine Emulator) team to compress arcade ROM sets and hard drive images. Over time, the format evolved to support CD-ROMs, DVD-ROMs, and hard disks.
You do not need to download "pre-converted" PS2 CHD ROMs (though they exist). It is legally safer and technically better to rip your own PS2 discs to ISO and then convert them. ps2 chd roms