I think with the way things are going an x86 emulation based system with at least a 1.5 Ghz proc is plenty. That would give you up to PS1 compatibility for certain, bringing you as far up to date as XBOX and back as far as computer space! The pico ITX spec is perfect but still too pricey (for now). The Microclient Jr looks to be exactly what the world needs but needs a faster cpu is a must. Like I said, PICO ITX at a sub $150 would be amazing for building your own console. As above, I ave to agree the Intel Atom is PERFECT in all facets. GMA 950 graphics is plenty for xbox and backward compatibility. Though the desire then would be to play PC games, too, which brings us my next paragraph lol.
What I really believe after tossing this idea around myself is that there would be a better market strictly for USB based cartridge readers with native system jacks. Basically the I/o of a chosen system in a USB breakout box. The unit would come with a licensed copy of whatever emulator. A universal box with all cart slots and controller jacks would be prohibitively costly. Ideally, when you hit the virtual power button with a cart installed, the emulator would fire up and run it with no clicks, keystrokes necessary to start the emulator in full screen mode. While stupid sounding at first, it would set the entertainment center world on fire. You could also use roms but, hey, having to blow into a 20 year old cartridge is half the fun too.
If going for the Atari computer based gaming user base the best option would be a re-release of the 1200XL but with all the desired mods preinstalled or the same in modded 1200xl laptop form. A la the legendary 1500xl laptop our madman peer has created. I think with China open for business just about anyone could fund a computer on a chip project right now. Maybe the time has come for some of us to make some bets!

I can see a definite half million units being sold if the device is pal & ntsc compatible, maybe more.
Edited by Noelio, Tue Jun 24, 2008 9:33 PM.