Actually, SOME emulators are perfectly legal.
You see, as long as the machine and game itself is obsolete, then it's fine. Also, if you own a legitamate copy of the game, then an emulator is nothing more than a backup, so again, that's fine.
NES, SNES, Mega Drive (Genesis), old Arcade (MAME) units, they're OK.
The likes of Playstation 2 and XBox emulators ARE illegal because these systems are still in circulation.
As long as you are talking about the legal kind.