I wouldn't trust that personally, I heard somewhere that its just a rumor... I dunno... in any case, the game is 16 years old. I seriously doubt that Square would have issues with someone downloading... oh, I mean Square-Enix... if they were still Square, maybe...

I use emulators myself, but the newest game I have is Super Smash Bros 1, which is 9 years old, and I only got it because my smash disappeared, which seriously sucks... in any case, if you want to try the rom, yes, it is in fact illegal, and I think the only way its legal is if you ripped it yourself as a backup. However, the chances that anyone cares are quite limited. That may change when the Wii comes out with its thing about playing old games. I would still get the remake even when I already have the game, simply because I want the upgraded graphics and total awesomeness of it being on the DS. If I found Super Smash Bros anywhere I'd probably buy it if it was reasonably priced.

Anyway... the way I see it, if anyone bugged me about it to get rid of them, I'd do it, but it probably won't happen. Until then, just don't get any PS2 or X-Box 360 games and you should be fine.