Of course, if you're installing OS X on an Intel machine to run Carbon applications with Rosetta you might as well go with 10.6. The compatibility will be "about the same" as 10.4 and at least you'll be able to run a wider selection of newer software alongside them. (Software for 10.4 is getting pretty thin on the ground these days; it's only a matter of time before 10.6 gets cut off, for that matter.) And, of course, even as good as Rosetta was, on something like a Nettop motherboard performance isn't going to be fabulous. It was quite an achievement that the original batch of x86 Macs managed to be "feel" about as fast as the PowerPC boxes they were replacing, but detailed benchmarks show the truth, which is it was *totally* worth your time upgrading to native applications.
In short, if you really want "Classic" in a shoebox or a laptop your best bets are a G4 Mini or a G4 Powerbook respectively. I'm certainly not going to make the case that SheepShaver is a great solution. It's worked... okay, for me, and actually seems to run 7.x pretty well if you find the right ROM, but it is really fragile with 9.