The size of the ram allocated to the 68k emulator is not something that can be changed on the fly - it has to be done in code and the rest written for that amount of space. At the moment, a 4mb rom on the current 68k core would require over 12mb of ram ! Definitely an excuse for a 32mb upgrade, but since most people don't have the upgrade, I don't think it's really fair to expect it.
Its way to early to describe any more of this emu later as I've not actually written any code for this yet - just diagrams, notes, how it would work, how it would fit together, pseudo code, memory requirements, allocation of resources, etc. However, it's certainly looking good so far.
Now, since I've bought a Megadrive + games, and have Sonic both on cartridge and as a rom dump, I tihnk this is going to be the first game to be compatible. Before that, it's going to be mostly pd-stuff that's easily to emulate.
I'll release something as soon as at least one (non-pd) game is playable as a kind of technology demonstration. No use boring you with half working pd-games!