[Quall999]

You can use any modchip to use emulators.

Anyways... For every console, an emulator is loaded and either
1.goes to a title screen for options and such
-or-
2. Goes strait to a list of the roms you have. You put the roms in a specific folder on the cd (or xbox HDD), and it loads whatever is in that folder. A mouse isn't needed, because you browse roms and stuff with the d-pad.

Emulators on the xbox save the games on the HDD (as an emulator for PC does). Since there are extra buttons on the controller that aren't in use, some emulators configure them as turbo (game speedup) and game options.

Also, most xbox console emulators (like snes and genesis) allow 1 save state per game. The screen size is also able to be configured.