I own the Magic box and it is excellent. I use it for Street Fighter Anniversary Collection and Capcom Fighting Jam. My game has improved immensely, there is no input lag whatsoever. I will test it with DC pad later but Saturn and PS controllers work perfectly. For the setup you are planning to use, it should work just fine.
Well I just got this and no, an X-Arcade with a dreamcast adapter wont work. But goddamn this thing's awesome with a Saturn pad. I've tried it with Capcom vs SNK 2eo, Guilty Gear X2 and Metal Slug 3 and it's very responsive.