Retro-gaming has been hot for a while now. A lot of people, myself included, use MAME (The Multiple Arcade Machine Emulator) to play classic games on our PCs. The graphics may not be bleeding edge, you’d never mistake it for a PS3 or Xbox 360, but it can be fun to play the games you used to enjoy. Personally, that tends to be games like Star Castle, Time Pilot ’84, Zaxxon, Tempest, etc – games that voraciously ate my quarters back in the day. 
And it can be more convenient than setting up my Atari Jaguar for a game of Tempest 2000. Although I do own a custom rotary controller for that. 
The trend has also manifested with retro-games ported to cell phones, PDAs, etc. Since many of these old games were originally written to run on simple 8-bit systems, mostly the venerable 6502, they don’t need a lot of resources. A modern cell phone has more processing power and memory than any of the first several generations of home gaming consoles or arcade machines.
There are also emulators and retro-gaming packages for modern devices like the Nintendo DS or the Sony PSP. There is a little irony in someone buying a PSP, with all of its power, to play retro-games that could probably run in just the memory controller.
Now, GamePort Retrogames, LLC is designing a handheld gaming system designed for retro-gaming. It is designed to accurately reproduce a number of early gaming platforms to run the original ROMs. It uses an SD card to store games, making it easy to expand the storage and carry a library of your favorite ROMs. The screen is a slightly off 480×234, but it also has a standard composite video out to connect to a TV. You can get all of the details here.
Pricing and availability are not yet known, but if the price is reasonable, I would be tempted to pick one up.
I picked this up from Ubergizmo.
