There are plenty of boards with video and audio integrated but size is a major issue. I would use this
board 100 bucks aint bad considering all you would need is the powersupply ram and drives.
it has an integrated 533, I think you can get em up to 1 gig. Not great for current gaming but defenetly enough for nes emulation.
You can probaly fix a micro atx powersupply in there too if you do it right.
an old laptop hd would be best, you can get converters to use on desktop boards.
You should also look up that hack so that you can attach old nes controlers to the parellel port and wire that into the front plugs.
I would consider doing one myself but I have enough computers and need to start saving some money.