It is a preloaded program that "mimics" the original xbox's spec's, making it possible to play xbox games on your 360. This is also why you will notice that you don't have the normal Live options...
I don't think there is one sorry. The most recent is the playstation 2 emulators which are rather unstable at the moment.You will have to wait ontill the next xbox comes out before the emulator will.
If you are looking for emulators to play Xbox 360 games on the PC, your out of luck, as Microsoft has talent to steam off today's hardware hackers. However, there is hope for some, as an unknown...