It's fantastic for that purpose and why a lot of us are excited to snap them up for $20.
To explain the conflicting opinions, fresh out of the box without any modifications it *IS* a hunk of junk. It doesn't work right, it's a defective product. Framerates are choppy, gameplay is screwed up (many older consoles tied gameplay to frame rates assuming they'd be static), it's a hot mess.
Fortunately there's an easy fix! As has been posted a bunch of times in the thread, you can jailbreak it extremely easily. Once jailbroken, that defective hunk of junk is transformed into a fantastic device. As RFDG said above, it runs a number of emulators flawlessly. But even if you don't want to mess around with emulators and installing other games, simply flipping the switch from PAL to NTSC fixes the framerate and gameplay issues. Why on earth Sony made that switch inaccessible in the base UI is baffling beyond words.
It's entirely reasonable to say it's a broken hunk of junk to anyone not inclined to tinker with it for 5 minutes and install the hack. It's similarly reasonable to say it's a fantastic deal for anyone inclined to copy a piece of software off the internet to a USB drive and plug it in. Different potential consumers.
No one should think for a second it's a reasonable buy at any price without the hack though. You *will* be disappointed.