Yeah. The Xbox is $150. Plop in a $50 mod chip and you've got a decent MAME PC that will also play quite a few arcade ports, as well as Xbox exclusive fighters and such. Things like Soul Caliber II probably wouldn't be emulated for another 3 or 4 years at least, but can already be played on Xbox.
Trust me. This is a very good thing. And I have to agree on the analog thing. While I think that this thing would be MUCH better if it did support analog sticks and all the buttons (though the triggers would probably have to be buttons that activated a hard trigger press), it wouldn't help many people out. As Minwah mentioned, very few people have analog sticks on their control panels. I must admit, though, that if this thing had support for analog sticks I would probably remedy the lack of analog sticks on my control panels pretty quickly.
As is, though, it's a VERY good thing. Thanks Andy.