Why does my ZTE Score have so much trouble emulating video game consoles + games? I have an ARM v6 600 MHz revision 5 CPU with 512 MB RAM. The GPU is an Adreno 200 with 245 MHz clock speed.

It seems that anything in the 3-D realm, including some 2-D games, have trouble emulating perfectly smooth. I realize that 600 MHz CPUs are pretty poor these days, especially single-core and with dated microarchs.

Some emulators also exhaust the CPU. My question is, is this ability to perform emulation based more on the hardware or software on Android-powered devices? It has to be a little of both, but I'm using Gingerbread.

Do any newer Android OSes have better demand, or am I limited solely by the CPU?
The clue is in both the graphics GPU and the CPU for emulation. The Adreno 200 GPU chipset and its related driver is old by today's standards, plus the fact, that the older ARMv6 devices were more or less running kernel 2.6.xx which did not have much Adreno driver integration into kernel space. 

This was the key change in Ice Cream Sandwich and later, which usually went hand-in-hand with the kernels 3.x.x where the actual driver was loaded into that kernel space for Adreno chipsets, which in turn, made the GPU drawing much smoother. There was attempts to backport those kernel features from 3.x.x back into 2.6.xx which was a nightmare for the ARMv6 so all sorts of hacks were put in place to give it, more or less, a "smooth" experience for the GPU and Adreno at that point. Plus the fact, that kernels 3.x.x has dropped ARMv6 architecture support as well!

As for ARMv6, well, it did the world good and is gathering dust. I did point out about a year or so ago, that ARMv6 cheap smartphones will be phased out in favour of single core ARMv7 in that category of cheap smartphones. 

Nonetheless, emulation is indeed CPU heavy, no questions asked, as the emulator's running code for such a game has to be "translated" or "interpreted" for the actual CPU that the emulator is running on. 

Might be worth trying a better emulator, I did run Pokemon on the Gameboy Emulator, this was found in the F-Droid repository,  and ran ok on the Zte Blade (ARMv6, 512Mb RAM, Adreno 200). The only snag with such emulators like that, is you need to find the emulator ROM, really, a small file that simulates the equivalence of the BIOS for that said emulator. Plus, it is hard to find for that matter as well due to copyright laws.