I sold my PS2 earlier this year, so I'm kinda out of touch, but:
- Ghost Recon 2 is out now, Ghost Recon 3 comes out in the first week of November.
- Twisted Metal: Black - is like a driving, shooter game
- Gauntlet Legends - is an update to the old, arcade classic Gauntlet
- a couple of the James Bond games have it (007 Nightfire and 007 Agent Under Fire), but I'm not sure how it's implemented.
- Unreal Tournament
I found
this article. It lists a bunch, but I only mentioned the ones that are familiar to me. Hopefully you can access it w/o registering for the website. (If you get an ad, look at the top for a link to the article.)
Now, I know you don't want this suggestion, but please hear me out on this

. For the kind of gaming you and DH like to do, an xbox would fit perfectly. The three best co-op shooters of all time are made only for the Xbox: Halo, Halo 2, and Doom 3. The two Halos are worth the price of the Xbox. I've played them for hours with my nephew.
Plus, with the new Xbox coming out in November, you could probably pick a used one up for well under $100 (or I could sell you mine for dirt cheap when I get my new one

).
Have fun!