Question: I know that the iPhone SDK requires Leopard, i.e. ~900mHz G4+ w/ 512MB RAM. And I've used XCode in the past, so I have a good idea of how that performs. But I've never used the iPhone emulator included with the SDK, and I'm wondering what kind of CPU/memory resources it needs to run smoothly.

I would just download it and see for myself, but my (ancient) iBook can't run Leopard. Before I go buy a new machine, I'd like to get an idea of the **slowest** system that can run the emulator at a speed close to that of the hardware.

Answer: 
The iPhone SDK requires an Intel machine running Leopard, although I believe there is a way to get it working on PPC Macs (but you still need Leopard).

The SDK does not have an emulator, it's a simulator. The code it runs is native so there is no emulation overhead. You will find that even a low-end machine will run your code significantly faster than on an actual iPhone.

(This is why it's super important to test your application on an actual iPhone, particularly for anything graphic or processor intensive).

1GB of RAM and any Intel based Mac will be more than sufficient for both development and any docs/webpages you are likely to be referring to.
From the release notes:

"iPhone SDK requires an Intel-based Mac running Mac OS X Leopard version 10.5.4 or later."

I use it on a Core 2 Duo Mac mini (i.e. before the recent update) without any problems, so I don't think CPU speed is really something you need to worry about. I've 2GB of RAM in that system; I don't know if the tools will run well in less than that.

Edit: Of course, it's years later now. The latest version as of this update requires Mac OS X Lion, and it seems obvious that Apple will continue to update Xcode only for their latest OS.