Yes but, on my computer, any image above or equal to 640x480 is slow as heck, I tried ff7 (for the pc) in software mode at that resolution, its much slower than if i use my geforce 4's video acceleration, Ie When the game scrolled it had a visable lag... dunno if that makes any sense.
You're right its impossible to reproduce exactly what an n64 video produces but you can get it near to correct. Banjo-Kazooie for example, looks pretty good with quite a few video plugins, in my opinion better than it did on the real n64 because its much clearer and sharper.. but thats me.
Software render would be possible to reproduce accurate video I suppose, but at the cost of alot of cpu time, and current processors just aren't able to do it well at the moment.