How to backup Ps2 (DVD) to CDR (700mb)?

yes you can, you need to perform what is called a rip, to extract the game data from the DVD and modify/remove the files to fit/burn onto CD-R.

In your scenario, the rip would not involve physically removing any files from the game, it would be more amending the DVD checks to allow it to boot from CD-R.

for rip kits check out http://ps2modz.cjb.net/
 
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