"These CD-i emulators were used during disc development to simulate a CD without having to burn a write-once disc. The app, images, etc could be compiled into a disc image file (sort-of like a .iso). The emulator would read data from the disc image file as if it was a CD. Think about them as a virtual CD-ROM drive that need a device to make use of the data. They need a CDI180/181/182 or CDI605x player or a compatible recorder. And of course a PC to control them."
A CD-i Emulator is a piece of hardware that contains a large harddisk and control circuitry to provide a stream of audio, video and program data to a CD-i authoring player in exactly the same way as if it was being read from a CD. The Emulator takes care of interleaving the data, creating the sector format and contiuning the feed of data according to the specification as laid down in the Green Book. When a CD-i Disc Image is being created, it can be read by the Emulator and played trough the CD-i authoring player for testing purposes.
You need either to do this, or make a one-off on CD-R for testing, because you can't test CD-i's realtime behaviour at programming level (the audio, video and program data is not interleaved yet at that time). Since CD-R was just beginning to appear when this CD-i authoring hardware became available (early 90s), and a CD-R disc costed around US$ 50 a piece, a CD-i Emulator was a very economical solution for studios.
Two versions of the Emulator were being sold by OptImage. Both of them contained at least a 1.2 GB harddisk (enough to keep all data of a disc in its original form and the required space for a full CD-i Disc Image). The Emulator was based on the same version of OS-9 that is used in CD-i players, and they contained 2 MB of memory. The first model was generally refered to as E1 (probably Edition 1), it runs on a 20 MHz 68020 and contained a floppy disk drive which needed a suitable floppydisk to boot the system up, and a lot of confusing connector types at the back.
The E2, which was released some years later and runs on a 24 MHz 68340, lacked the floppy disk drive since all required software was build in ROM, and it had a more convenient way of connecting to the CD-i authoring player. Both versions of the Emulator can also be used for the emulation of other CD-i compatible disc formats like Photo-CD and Video-CD. Some Video-CD studios are known to use a CD-i development player and and Emulator in their quality checks.
[Thanks, ICDIA, cdifan, Jorg Kennis, Jon Piesing, Retrostuff.org]