When it comes to ROMs, the downloading of is illegal. The copying of a game from a pack for personal backup is quite technically not against the law and I really don't think they can do much but blow a lot of hot air, though they say it voids your warranty.
I'm not sure how they'd be able to tell whether or not you ever made a copy of your game if you sent it in for warranty, though. :\
WiFi would be enabled in the emulator, just like the actual controls, the simulated touch screen, etc. would be emulated in the emulator. It'd probably just be a matter of "Enable WiFi" in the emulator or something, I dunno. None of the DS emulators are even worth downloading right now, and even if I had downloaded one that worked, I wouldn't say where or how.