Very impressive, but performance sucks, even in google chrome. Keep in mind that the 486 is capable of fully emulating the NES. The truth is that javascript will simply never be appropriate for tasks such as this. It is too slow and no amount of magic fairy dust optimizations will make it come close to high performance languages.
Java on the other hand (as much as I hate java) can do high performance stuff. Here is a java applet NES emulator, with sound: http://www.nescafeweb.com
I heard an interview with Brendan Eich from last year where he says there are still many javascript optimizations that haven't been attacked yet, that there is still a lot of low-hanging fruit.
He also predicted speeds bordering on C within a few years.
Even if JavaScript is slow as a turtle, Html5+JavaScript (H5J) is still a lot better for making simple animations than applets. With WebKits 3D effects, animation will look just as slick and smooth as flash.
In terms of performance, I couldn't tell the difference between a real NES for Zelda II (like 40 fps). The performance for Chrome for me was stellar, almost perfect. (v3.0.196.2)
WOW - I just installed Chrome for Intel OSX, and this is amazing. The performance in Firefox 3.5 was unplayable, while Safari 4 was much better, but Chrome is insane.
I can't believe what I just witnessed: a playable javascript NES emulator. I think this is a pretty significant step for the "web," actually.
Java on the other hand (as much as I hate java) can do high performance stuff. Here is a java applet NES emulator, with sound: http://www.nescafeweb.com