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sethnintendo said:

Okay so most are saying emulators are legal. I will look further into it but you gotta be fucking kidding yourself if you think people are downloading these emulators to play just custom made games. I beleive most people are downloading these to play the classics.

Actually, that's legal too.

Bleem! who won their case was specifically marketed as an emulator that allows you to play PS1 games on your dreamcast or computer.  They even used direct images from Sony created exclsuives like Metal Gear Solid and Tekken

The above was ruled totally legal. 

The only thing in emulation that's actually illegal is downloading a Rom from the internet.