Even if the touch screen can be made to work with an old game port, often its totally crapped up to the point of being a terrible version of its former self. Checkout my review of the Secret of Mana iPhone port I wrote some time ago for more of my thoughts about that. I do a side by side comparison of the iPhone version and in the end I had to stop playing it because it attacked my soul.
http://cheerfulghost.com/jdodson/posts/259
I have spent many evenings scouring the internet for a handheld that makes sense for me. I want to run the games I already own on my NES and Super Nintendo and don't want to buy them again. I want to run Doom and Quake too. You know, normal nerdy shit. I don't mind a store where I buy games either, as it turns out I love buying games that are awesome.
Recently the GCW Zero was successfully Kickstarted and is nearing a normal retail launch soon. From all I have read, this looks like the device for me. Totally unlocked from the start, it runs Linux and can do much. Has the form factor of a PSP or DS and looks to be quite powerful. I have heard the device will sell for around $160 or so and that sounds reasonable.
When they release more details about when it becomes available for purchase, ill let you know.
http://www.gcw-zero.com/

I currently have my retro gaming needs handled pretty well with my hacked wii, but I would love to have that experience in a portable. I've been playing PSone games on my PSP lately, and it's been awesome. I might look into this when it hits the general market if it's not too expensive.
Ill let you know how much it is. I am fairly certain ill pick one up if I can and of course report back :D
WBS, you can hack your PSP quite easily and get emulators there as well. I've played SNES games on my PSP more than actual PSP games.
Already hacked. :P I didn't feel like buying all my PSone games again on the PSN store just so I could play them on PSP. I haven't looked into an SNES emulator though, but that would be cool.