I have been developing a hardware based cd emulator device as part of a senior design project and have reached a stage where it is now partially usable. It is a usb 2.0 (480 mbit/s) device that operates as an external usb cd drive, and currently uses iso images. It can read at 6MB/s or 40x in cd speed terminology. It has a 20x4 character lcd and 4 buttons (those aren't programmed yet).
I developed this to overcome limitations of software based cd emulation.