I'd say this is in the mid-stages.
Japanese developed by a guy that's a bit hard to get a hold of, named Shima-san. He does post on the BBS every now and again.
Plays a good 30-40 games I'd say (confirmed) without backgrounds. SOME games are pretty playable even w/o the backgrounds (Twinklestar Sprites, and some other shooters) some are not playable -- like games where the "background" is actually the platform the character is walking on.
No sound emulation
No ISO support (don't think it's planned, either)
No English documents
Pretty easy to setup though. You just need a BIOS file named properly in the the SSF directory, along w/ the minimum specs.
http://home.h01.itscom.net/phantasy/