I just thought I'd throw my 2 cents into this discussion. It's nice to see that there's quite a lot of interest in a new hardware-based Atari re-creation. I'd personally get one of those too

And it's just as nice to see that many people respect what's been done with Stella to this point. The latter point makes me especially proud, since while I haven't done everything alone, I'd like to think that I had some significant contributions to getting Stella to where it is now.
There are several points mentioned above that I agree with. Whether the Atari is re-created in hardware or software, it's still going to be an emulation of the original. Unless you use the original chip masks and recreate the chips using similar manufacturing techniques, there's no guarantee that you'll emulate every 'bug' in the original design. As for which route is better, I personally agree with Batari in that software emulation running on custom hardware could be brought to market much faster than designing new hardware from scratch.
The concerns revolve around the lack of 100% emulation to date. I think this could be relatively easily solved with more manpower and testing/feedback. And having someone (or more than one person) solely dedicated to working on it. That means it would need to a 40hr/week job for someone, not a side thing as Stella is to me right now.
There are also perceived problems with 'jittering' video and sluggish controls in Stella. As Random Terrain linked to above (in which I discuss the specifics), this is partly an operating system problem. In making Stella run on general-purpose machines, we get some negative consequences. I won't go into the specifics (see the link above for that), but it basically comes down to an issue of running a real-time system on a non-real-time OS. And as I mentioned in the link, using OpenGL mode and sync'ing to vblank/monitor refresh rate on a 60Hz LCD results in smooth movement, exactly like on the real system. So the Stella codebase
is capable of such a feat; it's the operating system you're running on that causes these issues. But if we were using custom hardware, that drawback could be eliminated.
Other consequences come from adding extra functionality to Stella. For example, having cheatcodes, a built-in debugger with breakpoints, two separate rendering systems, etc all affect runtime performance. All these things are in the 'fast path', and slow down the emulation somewhat. Now, with the systems most people have today, you're never going to see the performance hit, but it will be there on slower systems. All this stuff could be removed for a dedicated hardware port. Point being, I could make Stella faster and use half as much memory if required. Remember, the code originally ran on a 486. It can again if need be (minus all the extra features people have come to love).
I should also add that the actual operating system you use has an effect on the emulation too. Even beyond the real-time issues mentioned above, certain OS's are just better at doing what Stella requires than others are. I don't say this to start a flamewar, but OpenGL and video performance in Windows isn't as good as in Linux and OSX wrt Stella. This is a known problem, and probably won't be improved on unless Microsoft provides better integration of OpenGL. I say this to make the point that you shouldn't judge the emulation performance of Stella based solely on how it works in Windows. It's important to separate emulation issues from platform-specific issues, and with the right dedicated hardware, emulation can perform much better than any current OS.
As for whether emulation is considered worse than hardware, consider that one of the most popular hardware releases for 2600 enthusiasts right now (the Harmony Cart) is actually emulating the bankswitch schemes in software. And I haven't seen many (or any) complaints about games not working. If done correctly, emulation can be invisible to the end user.
Anyway, I don't mean to enter this thread and say that a hardware-based Atari should be trashed, and you should go with emulation instead. I'd definitely buy one of these devices if it existed, no matter how it was implemented behind the scenes. I just wanted to add information (from my somewhat unique experience) that the issues aren't as clear-cut as it first appears.
As well, writing this was a nice distraction from working on the Harmony and KrokCom software ...
EDIT: I just wanted to add that the screen sync issues aren't unique to Stella, or even to any operating system. Older computers used to work this way. The C64, Amiga, even DOS had the ability to 'hook' their processing into the system hardware timer. This is what allowed those older (and much slower) systems to have smooth animations that even multi-GHz/core machines can't do today. So I don't feel too bad in not having solved this problem yet; it's something that's much bigger than Stella.
Edited by stephena, Sun Oct 18, 2009 10:58 AM.