would the IDE Adapter simply connect to the rear port of a TG16/PCE Core System
Yes. Think replacement cd base.
Given that the PCE uses modified SCSI, that might be easy to hack
PCE uses a sub-set of standard scsi. And, fyi, IDE is only simplified scsi 
I'd rather see a system card that packages the ADPCM hardware and a CD Emulation BIOS with a large pool of flash memory. CD on a card.
So would I. It would probably cost > $5000 or so, but it would be neat...
Keep in mind, you are asking for:
1) over 650M of flash memory. At 1M for $10 (AM29f080), that's $6,500, not including other support chips.
2) Another 8K and an adpcm chip. That they don't make anymore. Good luck.
And what about backup memory?
(Yes, maybe I exaggerated the problem. However, you would have to do all the cd hardware handling on the card. Half of the signals available through the external port on a tg don't exist on the card bus. Ergo, you would have to decode -all- the cd hardware from just writes to addresses. sounds like a huge multi-layer card would be needed...)
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Now, consider what I've actually said:
1) we make a board, like the cd-adapter, that accepts an ide drive. We have plenty of board space to use an fpga (or hell, a micro-controller if we want) to run the adpcm, backup memory, and ide.
2) we figure out the cd-bios, and mimic the calls to use the custom adapter.
It might cost $300 to make; probably not, though.
Then think about this: Assuming that ide is standard across devices (or that the programming accounts for differences), what would stop you from hooking up a hard drive? That was charlies first choice.
Or better yet, using an ide->compact flash adapter. Compact flash may not be the cheapest route, but they aren't that expensive....
Or my favorite: adding a usb controller, so you can use an external usb drive
Could you also integrate various Audio and Video Outputs into the back panel:
S-Video, SCART, Component, RCA Stereo, Headphone, VGA, and so on?
