i don't know if many people have heard of this, but there is an emulator out there called Basliisk II. It emulates the Motorola 68k Processor. it can run from system 7 to 8.1 (not completely sure on this.)

http://www.youtube.com/watch?v=Tkc0kimC-WA&feature=fvw

that video is basically how you set it up, and it also includes a premade basilisk II setup type of thing i guess you could say. it comes with System 7.5.5 and the Quadra 650 ROM. if you want to reinstall the os or install the os yourself, you can get Syste 7.5.3 free from apples website

>>http://download.info.apple.com/Apple_Support_Area/Apple_Software_Updates/English-North_American/Macintosh/System/Older_System/System_7.5_Version_7.5.3/<<

its quite cool if you ask me. you can find some old software via oldapps.com for it also.
you can also find the System 7.5.5 update for it.

Cheers!

You can run as far up as OS 8.1 on there. It's nice, but a bit buggy.

I shall stick to my Beige Beast collection thank you.
I've used it though, pretty neat.
(I have:
PowerMac 6100\66
LCII
Classic
Performa 638CD
PowerMac 5400\180 -minus screen)

Basliisk II is kind of bad.

Sheepshaver, which I think is based on it, is much better. It can run everything from System 7 to Mac OS 9.

Grrrr.

Try here.

I've found Basilisk II more stable, faster and with more functions than other Mac68K emulators (like Fusion or SoftMac)

SheepShaver is more buggy: I've experienced several crashes when using it (too bad it's the only PowerMac emulator capable of running Mac OS Classic)

basilisk II is okay you just have to find a stable build.