As Bunsen said, 68k emulation wasn't in hardware, it was software on ROM. (That's partially why the first gen Power Macs had a ROM significantly larger than the 68040, because the emulation was included in ROM. Later Macs moved to not having a hardware ROM, but having the old ROM as a file that was loaded into RAM. This file contained the 68k emulation code, up to the very last G5. Only the Intel Macs, which did away with Classic, also do away with 68k compatibility. I have successfully run MacWrite 1.0 on a G5 through Classic.
System 7.1.2 was the original System when the first generation Power Macs came out. It contained almost no PPC code, relying almost exclusively on the ROM-based emulator. More PPC code was added each release, until 8.5 removed the boot code for 68k machines. Even then, 9.2.2 still contained some 68k code that had to be run in emulation!
In spite of the fact that 8.0 contained much more PPC code than 7.6, I find 7.6 to be a much 'snappier' OS on older and RAM-limited PowerPCs, even on the cache-starved 603. Once you get more than 32 MB of RAM, Mac OS 8 finally becomes more usable. (I have a PowerBook 5300 that when I got it, had OS 8 loaded on it, even though it only had 8 MB RAM! It was effectively unusable. Even with 7.6, iCab is slow as molasses, taking 2-3 minutes to load the 68kmla home page over a plenty fast network connection.)
The FireWire 800 G4 did away with booting into OS 9, although they kept the previous-generation G4 around as the "OS 9-bootable" model even after the FW800 G4 was replaced with the G5. The Aluminum PowerBooks are not capable of booting OS 9, while the Titanium models are. The G4 iBooks cannot boot OS 9, while all G3 iBooks can. The September 2003 G4 iMacs (1 GHz 15", 1.25 GHz 17") cannot boot OS 9, the earlier models can, although I am not 100% sure about the February 2003 17"er. The 2003 eMacs are a mixed bag. The 800 MHz/Combo drive model can boot OS 9, the 1 GHz/SuperDrive model cannot. All earlier eMacs can, all later eMacs cannot. (Of course, this makes it odd, since if you bought one 800 MHz and one 1 GHz, you could boot OS 9 on the 800 MHz, but you can't officially run Leopard; while you can run Leopard on the 1 GHz model, but you can't boot OS 9.)
No G5 (Power Mac or iMac,) and no mini can boot OS 9. No Intel Mac can even run Classic, much less boot OS 9.