Racketboy has a great article showing off some of the capabilities of the modern N64 emulator. If your machine is fast enough, most of the available emulators will really give you a noticeable resolution boost and better looking anti-aliased models. Using the Rice Video plugin with the Project64 emulator, you can even swap out the textures for some games with user-created texture packs.
I still use the real hardware (is the N64 considered “retro” now?), so before seeing this, I hadn’t even considered emulation for this platform. That all changed when I saw the Mario64 mod shown above. The selection of available emulators is impressive, and there are open source emulators available for just about every platform. I’m currently playing a game under Mupen64 on my iMac and it’s pretty flawless. My only wish is that all computers came, by default, with a nice joystick like they did back in the 80s.