A good nes emulator is iDarcnes and requires iPodLinux and therefore an old ipod (nano first generation).
@JoshM22: ipod nano 3G plays videos, and I prefer its landscape screen. The only improvement in ipod nano 4G is motion sensor. Even if the 4G can be tilted to see movies in landscape mode, I find it more convenient to keep it vertical. Moreover, games designed for landscape mode (I bought old genesis Sonic game for instance) are, from iTunes, playable on 4G. However, I still do not see how to play with the click wheel at right without hiding the screen with your hand...