Price drop is not that surprising, really, as PowerPC is a dead-end in Apple-country. Combine that with the less than sexy looks of the eMac and the reasons are complete.
The good thing is that it should run eUAE rather usefull, I've run it on a 333 MHz G3 with 512 MB RAM iMac and it was not too bad (for classic games).
As far as OS-es go, PPC OSX should be installable and useable. Consult the Low End Mac forums on the net about which is the latest version you can run. Also, some Linux-flavours should run on it, but Google.
The last OSX version I tried on the iMac was rather stable and usable. I kind of liked it.
Remember that a solution to run AmigaOS 4 on it is not available.
