Some readers may have already seen this, but adafruit has a great article written by Sifteo engineer Elizabeth Micah Scott about the challenges and trade-offs they encountered bringing their Gen2 product to market (full disclosure: I am an advisor for Sifteo).
I really appreciate the candidness of the writing, and the openness with which they discuss internal design aspects that many startups would normally regard as highly secret sauce. Then again, they do some amazingly clever things with very light, cheap 8-bit hardware, and they have every right to be proud of their technical accomplishments.
Sifteo has an SDK for those interested in developing for the platform.
I highly recommend the read, check out the article titled “How we built a Super Nintendo out of a Wireless Keyboard @Sifteo” here.