Today I came across a very interesting thread on the Xbox-Scene forums, Someone who goes by the name of Xexter has created a working NES emulator that runs the Windows Media Center PC's. I would test it out but i don't have MCE. He claims that the Emulator works fine but has no sound yet, but he says it will be added in an update.
Here's what he had to say about it:
I've attached a link to a version of NESCafe that works through MediaCenter on the Xbox 360. This is currently setup to run at 480p (Widescreen). You can edit thenes.htm file if it does not fit correctly on your screen. I haven't found a way to add a menu for the roms list so you will have to edit the nes.htm and change <param name="ROMFILE" value="/roms/whateverrom.zip" /> to whatever Nes rom you want to play. I've included a Public Domain rom for testing but have verified Zelda1-2, Excitebike, and TecmoBowl and all worked. Please do not ask for ROMs as they are quite easy to find (Google - "Nes Roms").
INSTALL: You will need to extract the rar into C:Documents and SettingsAll UsersStart MenuProgramsAccessoriesMedia CenterMedia Center Programs on your media center box. It took a bit for the icon to show up under More Programs but it finally will.
NOTES: Sound is not functioning, Media Center 2005 is required. If it locks up you will need to run something that warns you that it is a web page and check the box that says "Don’t show this again". Once you do that it should run fine. I created an MCL that just went to Google and then checked that box. I've also attached an image with the mapping of the Xbox Controller to the corresponding keyboard keys.