I'm not, by any means, an expert on this matter, but as far as I have noticed, here is a list of what's legal and illegal with emulators:
• Creating ISO Copies of a PS1/PS2 Disc... QUESTIONABLE
• Downloading ISO Copies off an online source... ILLEGAL!
• Obtaining BIOS Files from your own system... LEGAL
• Obtaining BIOS Files from an online source... ILLEGAL!
• Using an Emulator... LEGAL (Although Sony has showed signs that they frown upon the usage, it is not officially illegal to use an emulator.)
• Using a Nintendo DS or Wii Emulator... ILLEGAL!
SSD~