Pixelation wouldn't be a problem, take a look at any of the PC emulator's that are out and you'll know what I mean. A simple AA filter and all the jaggies disappear! My personal favorite is Super Eagle. I can play at 1024x768 and it looks smoother then it ever did on a GameBoy, which is the same resolution used by HDTV. Normal TV's are 800x600.
I hate to admit it but the main reason I want it is so I could have my complete Zelda collection on one system