Supermodel, the Sega Model 3 emulator, now has an experimental network-able build, allowing you to link 2 versions of the emulator together for 2 player games. This is the work of Supermodel forum member Spindizzi. At present network only works in 3 games; Dirt Devils, Ski Champ and Harley Davidson and LA Riders (so no Scud Race or Daytona USA 2 ... yet) EDIT: Nope they're all working now! It's possible, much like MAME and Model 2 Emulator, to either have multiple instances of the emulator on one PC or two linked. I'm using the former option here rather than the latter.
At present there is only a 32bit build and in order to run it you need the command '-no-threads', which as far as I understand it means the emulator is not able to use the PCs multiple cores which unfortunately slows down the emulator quite a bit (on top of the additional strain of two versions of Supermodel running simultaneously and taxing the CPU even further). If you don't use the -no-threads option the emulators crash. I've got both instances of the emulator here set up on the same joypad, but I forgot to hook up the accelerator to Player 2's controls.
If you want to find out more and download it for yourself then visit here: http://www.supermodel3.com/Forum/viewtopic.php?f=7&t=1430&start=110#p14247