To be honest, I want to see an emulator that does not contain save states or allows cheating.
Um... I just don't use these features, except to save when I want to stop and load when I come back.
As far as ROM pirating, this is my general philosophy: those who are going to pay are going to pay, and those who wont, wont. It may not be true in every single case, but it's a good rule of thumb. I'm not going to buy Battle Kid, but if I were going to, having a copy of the ROM would do nothing to change that.
Anyhow, the game seems cool in concept, but the actual game-play seems a bit unrefined. I'm impressed by what you've got, but when I play it I find the mechanics a bit aggravating and just can't get into it.