RISC OS running on a Psion5 like clamshell and keyboard PDA with hi res screen (such as the i-Mate JasJar I have infront of me [link]) would be great. However it would have to be quite a different beast to the normal emulators, as ARM on ARM instruction level emulation would give you around ARM2/3 speeds even on a 533MHz XScale.
Dynamic recompilation (nee JIT) would obviously give great results, but unfortunately is far too memory intensive to be used on devices which currently only have 48MB of available main RAM - indeed even the simpilest emulator is going be severly constrained by this. Running RISC OS code directly in user mode and provding emulation of SWIs would how I would approach it, assuming I had a vast amount of development resources to be able tackle the implementation.
But realistically if you don't have the performance differential of a desktop or good laptop system, emulation isn't an option on a PDA, running RISC OS natively is the only practical solution. People have reverse engineered the boot loaders and written drivers to get Linux running on PDAs, so theres no reason why a HAL implementation and drivers couldn't get RISC OS running natively too.