omfg I finally got it to work.
HOT TIP: when you press these input commands, HOLD DOWN THE TRIGGER(S) BEFORE PRESSING A FACE BUTTON. I kept trying to press them all simultaneously, and this confuses the heck out of whatever controller handler is coded in here.
steps:
1) install PC version
2) move 100% save file to C:\Users\[Your User Name]\Saved Games\
3) start game, go to "extras," "timesplitters 2"
4) pick "story," skip past cut scene
5) enter code in stage select. it will likely take you out of the stage select and then back to it. you can do the code slowly as hell. just, like I said, hold the triggers before pressing each face button as instructed.
...steps 3-5 again every time you reboot the game.
NOTE: doing this properly for the "arcade" unlock boots you out of TS2. That's fine. Go back to it, and Arcade will be unlocked.
Thanks all for the replies and help.