all you need is a modified xbox. either soft or hard mod. you can run what ever dashbaord you want. i prefer XBMC.
i would get a bigger HDD for the stock one is only 8 gigs. you can go up to 2tb (with hard mod).
you dont need any more upgrades for most emu's. ram upgrade helps some arcade emu's and N64. im a bit hazy as to if cpu upgrade helps. some one else might have that answer.
Mame is running great though. between Final Burn Legends and Coinops its some my favorite emulation.
there are many wireless xbox controllers. you can even install internal receivers for them.
your coming back to the xbox at an exciting time for retro gaming. All major emu's now (or in the very near future atleast) have video preview, screenshots, manuals, synopsis's, vgmaps, 3d box art, cartrigage art etc.... check out ResurrectionXtra's.
http://forums.xbox-s...howtopic=660135here is some videos of what is going on with ResurrectionXtra's: