A soft modded Wii will handle all you Neo Geo, Pc Engine and Arcade games (as well as SNES, NES, and Genesis). Just run component to your PVM and you're good to go, that's the setup I have now and they all run in the correct resolution. The Wii pretty much replaced everything retro except the cd based systems.
I'm not really sure of that. I don't know if it's because of the TV on which I have the Wii or the wiimote itself, but when I ran the manual lag test from the 240p test suite, I had about 20ms of input lag on average (two frames). I didn't bother to test with the other, lag-free guaranteed TV or with a GC controller, but I was slightly upset at this result.