Just a few side notes:
The first Dreamcast NES emulator also ran half speed with sound, but now there are two that run full speed with sound about 99% of the time (I've never seen NesterDC slow down).
PS1 isn't a good comparsion. PS1 just doesn't have the CPU muscle of Saturn, and it has half the usable RAM... two 26.8MHz SH-2's clobber PS1's r3000A, then you factor in the ~14MHz 68EC0000 for sound and the 20MHz SH-1... =) I don't know exactly how much the SH-1 could be used, but it could certainly handle the cartridge interface and probably also mapper emulation (incidentally, it has 512kb local RAM, and guess how big NES's biggest games are?).