Well, there are things you can do and things you can't. For one, you can successfully emulate GBA Roms, hacked or non-hacked. But, you cannot emulate DS Roms. That is due to the DS/lite/i have two separate processors for each screen. The iPod Touch and iPhone do not have the processing power for such emulation.
GPSPhone is the emulator you need to use for GBA Roms. You'll need to use WinSCP (a program, google it) to get the roms onto your iPod Touch/iPhone and into the ROMS folder of your device.
Cydia should be your jailbroken application of choice. Also, there are ways to get GPSPhone for free if you don't want to pay $5.