I think that would be awesome. Isn't there an NES emulator floating around, written in JS? 500MHz ARM should be enough to do it, even with all the overhead.
That depends on how accurate you want it to be. Good sound emulation only (by resid-fp, for example) takes a lot of CPU time, and until VICE 2 I couldn't have PAL screen emulation without slow-down on my 1.66 GHz Core Duo. For most games you could go with less, but some demos require pretty exact emulation of all quirks and bugs of the real hardware, and it's hard not being a perfectionist with great emulators like Hoxs or VICE 2.1.
The NES is another story I think. The hardware is much less temperamental, and most games don't rely on small nuances in its behavior.
