re: lightgun - Yes, lightguns are working pretty well now. The only problem is that lightguns for xbox only really work if there is a light background. Some games with darker backgrounds will not work well.
re: psikyo
Battle K-Road - plays very well
Daraku Tenshi - The Fallen Angels - choppy ; borderline playable
Dragon Blaze - plays well - some areas skip a lot for a few seconds
Gunbird - plays very well
Gunbird 2 - plays very well
Lode Runner - The Dig Fight - it plays, but it's difficult to see what's going on because of the dual-screen
Samurai Aces - plays very well
Sol Divide - plays very well
Space Bomber - plays very well
Strikers 1945 - plays very well
Strikers 1945 II - plays ok - some areas skip a lo for a few seconds
Strikers 1945 III - plays ok - some areas skip a lo for a few seconds
Strikers 1945 Plus - untested
Taisen Hot Gimmick 1,2,3 - plays, but again hard to see because of the dual screens
Tengai / Sengoku Blade - plays very well (and very refreshing from the very redundant vertical shooters)