With cleverness, I could see the memory constraints being not so terribly constraining, even without a (real) bank switching mechanism.

The reason we use "RAM" as we generally think of it is basically that other forms of storage are obscenely slow, right? In this case, however, our "mass storage" device would actually be... RAM. Just not directly-addressable RAM. Loading code and data from "disk" as-needed could be relatively fast.

Edit:

> No interrupts.

Good catch, that's probably something we'll see added. I don't think Notch will like emulating a thousand polling CPUs...

Edit 2:

Just spotted this in Notch's twitter feed: https://twitter.com/#!/notch/status/187454444571598848

"An emulator is coming Eventually(tm). I want to sort out some more IO design first, not release too early."

So, I/O is still up in the air.