The XBox is _the_ perfect machine for emulators! I bought a modded one two years ago, and enjoyed the machine since then. You don't even need a chip, all XBoxes can be soft-modded easily (just Google).
The hardware is powerful enough to emulate PSX and N64 in full speed, and a very good selection of emulators is available. Many of the emulators have been ported by a guy called "XPort", so all of these have (more or less) the same look & feel, and the same featureset (Nice GUI, savestates, screenshots, fully configurable controllers, support for USB-hardware, etc.). They can run from harddisk or DVD. The homebrew scene is not very active right now, but activity often comes in bursts (=lots of new versions in a short timeframe).
IMHO, on of the greatest advantages of this platform comes from the fact that your are playing on a TV-set. This means you will get _perfectly_ smooth scrolling in the games. For example, i'm unable to get real smooth scrolling in "Turrican" on the PC with WinUAE - no matter what i do (might just be me, there's a stupid LCD involved, which doesn't make things easier). I've already tried alot of different tweaks and settings, even running the USA version. Even in the last Beta WinUAE, i get occasional framerate-"Hiccups". The same game on the XBox scrolls abolutely perfect, when i start the game in the correct mode (PAL-50 for PAL or PAL-60 for NTSC games, in my case).
The two major negative points: most of the emulators are "half-legal", as they have been compiled with unlicensed versions of the MS XDK. And there's only a handful of people doing the ports, so there might be no new ports, if these people lose interest in the platform.
will get you started, if you're interested. Oh, and there are also quite alot of good native games on the platform (Halo, MGS2 Substance, Stranger's Wrath, etc.).