CPS3 is a quite powerful system and the XBOX CPU is barely enough to emulate it so you can expect some slowdowns in zoomed and graphics intensive scenes.
Also the XBOX RAM (64MB) is not enough to load the rom dumps and the rest of memory in the CPS3 hardware so the emulator uses a disk swap file to hold the uncompressed rom dumps and load from it as necessary. You'll notice some "hiccups" in the emulation in some scene changes, when the emulator needs to copy blocks of rom data from disk to memory (especially at the beginning of fights or when a super move is performed).
The Street Fighter 3 games run pretty well, with few slowdowns and frame drops. SF3 2nd impact would require twice the amount of ram to store the decrypted program roms due to having different encryption on program and data, so to make it fit in the XBOX RAM, the emulator decrypts the data plane on the fly (like the hardware does
) so in this game slowdowns are more likely.
Next to them are the jojo games, that sometimes need to copy big amounts of gfx data from disk to ram and have some framerate drop (specials, stand enter/exit).
The game with more slowdowns is Warzard, due to the abuse of zoom out (that requires the emulator to render more visible area), huge sprites and complex background graphics.
The emulation of shadows is not accurate due to the way the original hardware works. Emulating it properly requires a lot of extra CPU power and the XBOX will not be capable of running the games at full framerate. They are currently just darkening the image under them, that is right for shadows but not for other effects, that's a price to pay for playability