EDIT 3: Is it me, or does it seem really hard to use the Analog nub in SM64? I think it's too sensitive. It's really hard to walk as Mario or to turn the right direction.
I broke my left analog nub, so those settings are bound to be wrong. Try the DPAD version if its unbearable.
Tested 1080 again. This time at 700 MHz. The menu itself did not show up, but the background did this time. It seems that this is the same for the whole game. All of the menu overlays are not showing up. Seems to run well with frameskip 2 with sound. It's just that the sound is jumpy, like in most games.
I have tested 1080 before, it has trouble with my frame skip implementation (I'm pretty sure it used to work though). It should look fine with frame skip=1, but it might be a bit slow.
BTW: I also suggest trying framebuffer enable=1 and half resolution settings (ie framebuffer width=400, framebuffer height=240), some games work a bit faster.