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Sheepshaver is an emulator for Mac OS 7.5.3 through 9.0.4 coded by Christian Bauer and ported to Mac OS X by Ronald P. Regensburg. It requires original system files (i.e., those found on an installation CD) and a significant amount of tweaking to get working, but once it's up it works quite well. You'll be plunged into nostalgia when you see the old loading screen on your high-tech LCD screen.
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Basilisk II is an open-source 68k Macintosh emulator.
supported by SheepShaver (i.e., System 7.5.3