Interesting, never knew that.
1. What are the best emulators? I'm open to any OS. Being able to scale up on a tv would be great, and support for keyboard would also be nice.
Depends on what you're looking for.
In any case, Lakka might be too heavy for this thing but you can give it a try.
I would personally recommend you building your own desktop with Devuan/Debian
but if you don't want to, you could use Lubuntu as a base.
As for emulators, i assume the OS is going to be Debian/Devuan/Ubuntu.
If you use Ubuntu, i would recommend installing Padoka's Mesa PPA for the latest graphicai improvements.
There's mGBA which is pretty fast for GBA games.
You can play 3DO games decently fast using my 3doh fork
You will have to compile it yourself tho.
For Megadrive games, Picodrive or Sega Genesis Plus GX.
Both are proprietary though so you might want to use Mednafen for that instead.
For PSP games, you can't miss PPSSPP, which is a fast and pretty compatible PSP emulator.
Reicast, a dreamcast emulator, can also be compiled for Linux as far as i know.
You can also use Desmume and use it in OpenGL/JIT mode : it should run decently on it.
For PC-Engine, use Mednafen and use -force_module pce_fast to force the fast mode.
For PSX, PCSX-R is great and doesn't even require a bios.
Mednafen also has cores for NES, SNES (an early version of bsnes), GBA (pretty bad tho, just use mGBA), Lynx, Neo Geo Pocket...
What controller should I get? I've looked around, and I'm gonna buy this one for myself, but for friends and family I would like to buy some cheaper ones. So far I found SNES controllers, 2 for 16 bucks, but @DJ Omnimaga told me that the N64 needs more buttons, so that is a problem. So preferable less than 20 dollars for 2 controllers that will work with most, if not all popular emulators.
If you're looking to play retro games then look no further than the Hori Pokken Controller for the Wii U, which also happen to work on PCs out of the box.https://www.amazon.com/HORI-Pokken-Tournament-Limited-Controller-Nintendo/dp/B019QB4SL0/ref=sr_1_1/166-5799023-3348925?ie=UTF8&qid=1478153335&sr=8-1&keywords=Hori+Pokken+controller
It's really cheap : 20$ brand new.
Plus, you can use it on Linux. (as well as Windows and your Wii U, if you have one)