I have heard that Sharp/Cacko distros have great Japanese dictionaries, but haven't actually seen this for myself (I ditched them long ago).
Spreadsheets and documents are easy (under Debian you can even get OpenOffice, but it's insanely slow).
Audio is no problem (especially thanks to Quasar), video can be if you want to play them at 640x480 (you'll need to overclock for that). I have found that if you encode videos at 320x240 you get decent quality and it plays well (I just change the screen resolution to 320x240 while playing it to not have the actual scaling overhead, I believe Cacko can do that).
As for emulators, here's what I know of:
-PS1 (a little slow, maybe need to compile from source that won't build for me)
-GB/GBC/GBA
-NES/SNES
What I believe are available:
-Commodore 64
-Atari
-Spectrum
-More
The onboard can be a big deal. If you stay with the Cacko/Shard distros, you're limited to 4 GB SD (NOT SDHC) cards. With other distros you can use larger. You can also use any size of CF card, but then you can't have wilreless at the same time.
In short, get one with an internal drive if you want lots of storage without worrying about getting a big SD[HC] card. Otherwise, the Cx000* and C1000 Zaurii are the same.
No, nothing has replaced the Z, especially not if you want the Japanese stuff.
And asking if you want a Zaurus here is not going to get you an unbiased answer...Everybody will likely say yes (myself included).
If you want more of a mini laptop (ie, X11), I believe Meanie had some details on how to make pdaXrom Japanese. You'll have to figure that out on your own, though, as I have no experience with it.
Hope that helps.
*C3000 doesn't have much flash memory, which makes some distributions not work on it, so that model is NOT the same, FWIW.
