This is one of the coolest uses for a Raspberry Pi for those who just being introduced to them. I made something similar with them way back in high school and it really started to give me an appreciation for it.

As soon as the Raspberry Pi can run N64 (I believe they're a bit sluggish at the moment) and GameCube/PS2/Xbox (might take a while, but Dolphin is incredibly optimized at least) games well, that will be incredible. If you wanted something like that now, I think a cheap ebay pc would be the route to take, but I'm looking forward to the Pi's future.