but what does it actually offer that 'native' apps (games, media-players, etc) of your average hand-held device don't?
Think of it as the Amiga emulator UAE, it makes a virtual CPU which lets you run the same program on different real CPU's. Its basically making a virtual hardware platform and then putting an OS (any OS) on top of it.
As for making it better at playing games or watching vids, it does nothing except eat more CPU time in doing the translations from the virtual CPU to code the real CPU can understand.