Windows does indeed already run on Macs with Intel processors.
I know it is a fuzzy distinction, but Parallels uses Inte's virtualization technology to "virtualize" a separate Intel machine. Windows does run on Intel macs, however, it cannot "boot" without assistance. Once the machine is booted (by using Apple's Boot Camp, which is also a bios emulator of sorts), it runs just fine.
While it is possible to "emulate" PPC on Intel, Parallels Desktop is not the right product to do it. Rosetta does emulate PPC, but is not capable of running a classic environment. It is also not capable of emulation of the entire PPC feature set. It is very limited.
Emulation is slow and usually very buggy. It is easier to emulate x86 on PPC than it is to emulate PPC on intel because PPC has many more registers and much less built-in fall-back compatibility code. Basically, a Pentium 4 processor has built into it the ability to run any 386 software, so most applications are built to turn on and off any 486, pentium, pentium mmx, sse, sse2, etc. instructions sets.
At this point, you CAN run OS8 and OS9 (thought not 9.2.2) on Intel macs using SheepSaver or Basilisk. Both are kinda hard to run, but if you get them going, you're pretty much set indefinitely.
The long and short of it is this:
Virtualization does not translate the code in your Operating System or Applications. They are passed (basically) straight to the processor to be handled. This happens in "near" real time.
Emulation takes every instruction and translates it to the language that the processor in your computer understands. This happens at a significant performance hit, and usually is about 40-60% of real time.
Here's a decent article about the topic:
http://sysadminblog.blogspot.com/
If for some reason, you can't find the article, it's the one from March 1, 2006.