I had a Dell Axim (not sure of the spec), I'm pretty sure Dell gave it away for buying a couple Dell branded printers or something like that. I also had an HP iPaq which was pretty similar (I also think I got Linux running on that one somehow).

It could do a few fairly impressive things, like running emulators as you mentioned. But I think the problem with those was Windows Mobile or Windows CE or whatever they called it at the time. The touchscreens stunk as well.

It was just a crappy scaled-down version of Windows. It was missing the ability to run actual Windows software. It had a browser and a serviceable camera (it helped fulfill my eBay addiction at the time), but it wasn't the same as browsing on a PC.

It probably still wouldn't have been ideal, but within another 2-3 generations it would have been improved/faster and then 'good enough', just like the early iPhones.