Ignoring mrchocky's evasions, I can report that six/seven year old hardware runs ArcEm fairly sluggishly without any graphics acceleration, although if you're used to pre-Risc PC hardware and desktop applications then it probably isn't an excruciating experience. I'd imagine that you'd need a very fast processor indeed to get ArcEm running at Iyonix speeds.
As for putting Linux at the bottom of the software stack for an emulator-in-a-box solution, remember that you wouldn't need to have a full desktop environment, and if ArcEm ran on SDL (which I don't recall whether it can or not), then I suppose you wouldn't even need XFree86. What Linux and XFree86 would give you, however, would be the hardware support necessary to avoid the situation that the RISC OS scene currently finds itself in. Given the mere repackaging of Shuttle systems which is going on, and the amount of memory that you're going to be getting as standard, I don't see any real motivation for throwing out something like KDE in order to save 10-15% of your RAM for the emulator, however.