Dreamcast cannot emulate all PS1 games, only 3 (Gran Turismo 2, Tekken 3, and Metal Gear Solid), and you must own the BleemCast game specific version to emulate those games. Since Bleem went out of business, it will be difficult to get these discs. I love my Dreamcast, but the truth is it can't emulate PS1 games.
All of you people saying the X-Box will be easily emulated, I'm pretty sure Microsoft thought about emulation and probably put something in the software to make it difficult to emulate. I haven't tried putting the media into my PC yet, but does anyone know if it reads? I know for a fact that Microsoft's DVD-9's read data from the outside to the inside instead of the standard inside to outside reading. I don't know if this prevents reading the discs. If it doesn't read, it present a significant hurdle to emulating X-Box games. And I am 100% sure that many X-Box games will never be ported to the PC. Arcade style games like Dead or Alive 3 will never get ported because the PC Game market is not geared towards arcade games. Additionally, considering the lack of overhead that the X-Box has (small-footprint OS, no multi-tasking, etc) and the amount of overhead that Windows incurs, I would think that you would need a fairly powerful machine to emulate the X-Box. True, the X-Box uses x86 architecture but considering that emulation for a Playstation 1 is still not 100% perfect, nor does it run at 100% speed using emulators and the PSX processor is only 33Mhz ... Like the old SNES days when people made fake emulators that formatted your hard drive, I'll believe its the real deal when I see it with my own eyes.
BTW- Don't forget things like VMWare and Virtual PC which simply "emulate another x86 PC" ... Which is sortof like what emulating an X-Box would take. If something like this is done, then if you've ever tried VMWare or Virtual PC you'd know that the OS running underneath the VMWare or Virtual PC is extremely slow compared to a native PC. There are ways around emulating the entire X-Box but going brute force like this would result in needing a very fast PC to emulate a 733Mhz x86 processor properly.