Oddeus: Thanks .
I always thought, emulators and roms were ripped/cracked software and thus illegal.
Not inherently so. Dosbox for an example is an emulator, which is entirely legal. Other emulators don't need to be illegal either, and there are in fact console emulators which are legal. It gets illegal if you either don't own the game, or the emulator is dependent on something that you don't have the right to use. For an example, there is a PS1 emulator out there which is not dependent on a PS1 BIOS (which is owned by Sony), thus as long as you legally own the games, you are allowed to use this. Also, there are homemade games which are meant to be played on emulators or through other means on consoles, which are not inherently illegal either.
And if SEGA, Nintendo, Sony or whoever wants to create an emulator and let their games run on it, then that is entirely legal as well. Heck, the Wii virtual console is more or less emulators running on Wii.
As for the Sega Megadrive games/emulator that is sold on DotEmu, it is licensed by SEGA, and thus legal.