The dev community actually has an NES emulator. Which unfortunately has been banned from the Marketplace.
Mat Bettcher, the developer of the port was able to port code from the SharpNES and My Nes projects to WP7 to create his NES EMU 7 project. He’s now looking raise support from the WP7 community to hopefully sway Microsoft into opening up their platform a little bit, which should benefit us all.
Here’s a video of the emulator in action:
Hopefully, things will change. We’re still waiting to get our hands on a WP7 device ourselves.