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PS3/X360 Emulators = let me laugh, they just don't work (and btw the wiimote works very well on PC with bluetooth)
8/16bits consoles emulation: works perfectly
N64 and PSX: very good emulation.
Dreamcast: Some games work great (soulcalibur) others don't
Gamecube/PS2: still a lot of work to do!

Other than that I agree that the market is that PC/X360/PS3 are competing against each others. Xbox and X360 had some success in driving some gamers away from the PC. If the PC market is growing then sales of X360 will clearly suffer.
Europe is PCs strongest market and was for long the consoles weakest market so there is a direct link.