Slap Fight is around, but not that often. It's very expensive, but from what I've played of it, it's not all that (at least to me).
Panorama Cotton is nice -- it's better than the DC version that's for sure A definite MD gem IMHO.
New Zealand story I'm not so big on, but there are some other great games for the system. Unfortunately, there are lots of duds.
As for the emulators... playing on the Xbox isn't so bad. I play almost NO MD games on my Xbox, but I rip my SCDs to MP3 and put my Turbo Duo in the closet. Saves me space, and I don't have to dig out the CD everytime I want to play it.
I know what you mean though... I like playing the originals too, but I live in a damn shoe box.