There are two parts of the project, the Objective-C UI portion which can be built using Xcode, and the actual SNES9X source code which
can't be built natively by Xcode. If you wanted to modify the SNES9X source code (which I have been referring to as the Emulator code), you would have to edit it in a text editor of some sort and then compile the new libpocketsnes.a file via Terminal and the "make" command. Now however, I've created an Xcode project for the SNES9X source code which makes it much easier to edit, and essentially for this project Xcode reads the makefile to make the project. This way, you can edit both the Objective-C code and the SNES9X code from within Xcode in the same Xcode workspace.
Hope that cleared it up