I've tried the adhoc versions of the three emulators and it was very crude and unplayable. Except a little bit of lag, the adhoc transfer control inputs very well, but it never syncs actual emulated games.
For example, I played Progear with my friend with his psp right next to mine and I survived in a wall of bullets on my psp but I died on his psp since there was slight lag and the two separate games were playing on two different psps continuously while controls were transferred back and forth somewhat properly. If you are familiar with IRC chatting, you would know this as network split. I tried KOF98 as well and we almost had a double KO but he managed to win on mine but on his psp, I ended up winning. We ended up playing different characters on two different games all at the same time.
We thought it could be the problem of psp speed so we tried different processing speed and it actually made it worse since the default speed is the maximum speed that psp processor can perform (333mhz) We tried to load smaller roms and while it lasted couple more minutes before the network split happened, we noticed it on the second fight right away because both psps had same character selections but it had different background (samsho2)
To cut to the chase, it's not true adhoc wireless play. The emulator is just transferring control inputs back and forth. My friend and I ended up sharing one PSP's screen while using another PSP as an extra controller.
I heard NJ is retiring from PSP scene, but I hope he could fix this issue before he goes...