Emulation of next gen video game consoles is still impossible or at its early state (which means that the developer are happy to squeeze some debug numbers out of a subroutine of the game to reverse engineer certain functions).
For a full emulation of all system functions you'll need a system which is at least 5 - 10 times more powerfull, not taking into account that the current games systems are more complex than lets say an SNES, or Sega Genesis.
Of course you could argue: "Well but it is possible to emulate a gba advance or SNES system on a PDA or Gamepark 32 handhed device". Well, the last official SNES release was at the middle of 1997 one or two years before emulators became really useable (Around 1997 the Pentium 200MHz was released and even that machine is to slow to handle SNES games which utilize the FX or FX2 chip).
Nearly 6 years have passed until most projects reached this status. Even til today it isn't possible to play all psx games on a X86 system or an PPC system.
And concering emulation of certain systems the mac platform unfortunally is still disadvantaged. The only psx emulator which I consider as useable is epsxe for x86 system (Linux & Windows systems). There is flarestorm which I was unable to get to work, this is as next gen as you get on a mac.
Ah yeah there is Connectix virtual game station, very good (comercial) psx emulator but it will only work on OS9 (not classic). Unfortunally it is discontinued, Sony played the "write down the biggest number you can imagine" card and bought the technology. VGS is still a very good psx emulator although you'll run into problems if you try to emulate certain Square games. Most of them used special frame buffer technic or did odd things to gain more performace on the playstation, like moving texture data into unused sound memory.
To sum up, even as owner of classic games I don't consider emulation as a bad thing. The mac isn't exactly blessed when it comes to gaming (compared to other platforms), and emulation makes a lot of neat things possible like enhancing the dated graphics with filters (2xsai, opengl smoothing, bilinear filtering, higher resolutions). Its fine not to have to carry my classig gaming systems around, just my sleek ibook and the tv out adaptor + USB gamepad, if I feel the urge to play a round of Sonic 2, or Comix Zone at my friend's house. If you want to play current gen games you'll better consider buying the real hardware + games, it will take "ages" until the emulation is perfect enough (or even finished) to have a good gaming experience on your mac.
edit:
Concerning PC games, virtual PC isn't an alternative, no support for 3D acceleration, doesn't work on G5 systems, even to slow for most "every day applications".