does the gameshark cd for ps1 allow the ps1 to read and play backup ps1 games on cd-r from any region ?
No. Some GameShark versions and many Pro Action Replay cheats devices though have menu options that stop the CD motor allowing you to perform a swap which can let you boot CD-Rs. You should really just get a modchip though.
Been a while since I touched my old PS1, but I believe you can. If memory serves, it won't work if you just open it and insert the cd-r when prompted. You need to put a piece of tape or something to hold the button that gets pressed whenever the tray is closed. You'll know it works when you can open the ps1 during the PS1 boot screen and the disc keeps spinning. After you take care of that, just put in the cd-r once the gameshark boots up, select with or without cheats, and it should work. I don't think region matters with backups. You'd only have issues if your trying to play pal games on a ntsc tv, or vice versa.
You are missing the most important step. Your GameShark or PAR must have a function that stops the disc from spinning. Normally you open the lid and the disc stops and you change to your desired game (if using a CD based GameShark disc). But instead if using a CD version you need to switch from the GameShark disc to a real disc with a large data track. Then you need to use an option in the menu that can cause the disc to stop spinning. Some versions have something like this, others don't. If you have a cartridge based GameShark or PAR you don't have to remove the cheat CD, you just need to start up with a real disc with a large data track or otherwise compatible track layout for the desired CD-R copy. You still need to have an option in the menu to stop the disc from spinning so it's easy and safe to swap it. You could swap the spinning disc but I wouldn't advise doing so. You'll eventually damage the CD motor. One fun thing to note is that the original Japanese version SCPH-1000, atleast with the older BIOS, apparently you could use the built in CD player menu to perform the swap trick. In the end though, don't do any of these tricks. Install a modchip or get a modded system.
Most CD based versions of the Gameshark, Action Replay, or Codebreaker will allow you to do this once you get to the "start game with codes" screen because it will stop the disc automatically without you opening the lid. Two things; you'll have to have your lid sensors pushed down so the machine doesn't know you've opened the lid, and you might run into problems ToC problems on some games if you don't do a double swap since it's using the table of contents on the GS CD which only has one track and is extremely small. You can do the same thing with them on a PS2 if you have a flip top lid or whatever, that way you can load PS1 CD-R's or import games on a PS2. I can also confirm what MottZilla said. I had a launch PS1 (US model) and I used the swap method via the CD player for quite some time before I installed a mod chip. All models after a certain manufacturing date (or was it just the next mobo revision?) cut that out.
