A friend of mine has a PC set up with HyperSpin (one of the hard drive images you see sold in various places), MAME, and console emulation.
He uses USB versions of the various console controllers. An idea I think is rather neat.
USB version of the NES and SNES controller, an adapter for N64. Not sure what he does for Sega consoles, or Turbo GRFX 16, none the less I like the idea.
I hear a ton of good things about the wired XBOX 360 controllers.
I have several modified XBOX consoles with Coin-Ops installed. Some of which just have the XBMC skin and various emulator with complete US ROM sets. I never actually thought on it, but as noted in this thread the OUYA is a modern replacement.
Simply put all your ROM files on a flash drive and download the emulators from the store.
Most (if not all) are free. The OUYA controller is not the best, but I have used it with a wireless USB PS3 controller I picked up for $10.
The only issue I have had (and this is my fault for not making the time to solve this) is using all 3 of the PS3 USB controllers along with the original OUYA controller. I'd like to able to have 4 player gaming working.
The idea of a PC is a good idea, I've always liked that idea. As I said I also like the idea of controllers true to the consoles themselves (if doable). The XBOX is a little outdated , and the OUYA a great modern replacement. For simplicity you might want to look into it.