The code itself is yet unoptimised, the emulated game runs at 10-20 frames per second on the WP7-running handset (Samsung Focus). However, personally, it does already looks good :) Video after the break...
Matt intends to release the app for free on Marketplace, and also make the app, which itself is based on Open Source code. As reported by WMPoweruser, Matt has however spoken to Microsoft. You may guess, he got a big NO as an answer regarding his apps possibility to be allowed in the Marketplace.
Anyway, here's the video: Super Mario 3 live on Samsung Focus
[via VMPoweruser]