I had also been having a number of problems getting the emulator to run on my new Vista(64) Dell laptop. It sorta worked, but would always die, or a bunch of "J's" would appear as if I had been holding down the 'j' key.
Today I got the emulator working perfectly! All I had to do was to emulate XP. I right-clicked on the emulator executable and hit "properties", and then the "compatibility" tab. Then I changed its compatibility to "XP SP2". Now when I run it works fine.