PC-Engine can emulate NES. But emulate means to mimic. It can be alot of things. Some has for PC-Engine created a framework that allows for certain NES games to run on the PC-Engine with minimal game specific attention. Some emulators like PocketNES on GBA use the host platform's advantages to achieve reasonable performance. So if you emulate NES on Sega Genesis, unlike on PC where you need a fast x86 CPU to get reasonable speed, the Sega Genesis has a VDP chip which you could use for emulation of NES graphics. You'd have to take care in how the systems are different but right there you can reduce the load on the CPU by a huge amount as you won't have to software emulate graphics like you do on PC. The Yuji Naka thing I've heard before too. If you want to load GameBoy ROMs on a Super Gameboy, buy a SmartCard for GameBoy. http://store.kitsch-bent.com/product/usb-64m-smart-card
Super Mario Bros for the Genesis is NOT emulation, it's a port using the code from the actual NES ROM file. It's running directly on the 68k. Also, I found some ROMs a while back that used the Tristar NES>SNES converter and they actually ran fine on the SNES. Emulation wasn't perfect but they did run at full speed.
I don't think anyone was referring to that SMB on Genesis project. And no you didn't find roms that used the Tristar NES>SNES converter that ran fine on SNES. If you found anything, you found the old NES rom hacks to get them to run on SNES. The Tristar doesn't "emulate" NES at all. The Tristar includes a NOAC chip, and uses the SNES only for controller input. It outputs its own AV from the NOAC so there is no PPU interaction with the SNES. So to be clear, the Super Gameboy includes actual gameboy hardware in the cartridge. It does interact with SNES hardware for video, audio, and input. It's actually designed so a SGB game can use the SNES hardware. The TriStar, includes an actual NES clone on a chip like many "famiclones". It doesn't interact with SNES hardware at all, other than input. The hardware inside had some way to switch between outputting leeched video from the SNES or the NES NOAC video output I imagine. The TriStar 64 is the same thing only they added a SNES on a chip.
I stand corrected on both counts. It was about 10 years ago I saw those ROMs, I suppose I must have just made an assumption.