Here's two ideas, depending on how you're already set up.
If you've got the TV getting an S-video signal from the Outlaw, use the Video2 input for S-video and audio from the PS2. (A side note -- I plan to add a PS2 eventually, and when I do I'll set my system up as follows: video1 will be s-video from S-VHS VCR/digital cable box, video2 will be s-video from PS2, video3 will be line-level audio from TV for watching analog cable if the VCR is recording something else, and DVD s-video will be DVD player; TV will get an s-video signal from the monitor out on the 1050).
If you are using the composite video switching in the Outlaw, you could use either video2 or video3 for the PS2.
And I suppose, if you are not using the 1050 for any video switching, you could leave four connection as it is now for video and connect the audio (either 2-channel analog or optical digital) to the audio inputs for Aux, Vid2, or Vid3 (figuring you'd reserve Vid1 for the VCR).