How does the Virus PowerCore plug-in relate the Virus hardware synths? Is it an emulation?
No, it's not an emulation.
The Virus PowerCore contains a full Virus B / Indigo 1 engine algorithm (albeit with 16 notes polyphony) in plug-in form.
This is made possible because the DSP (digital signal processing) chip used with the PowerCore platform and the Virus hardware synths, is the same -- namely the industry standard Freescale (formerly Motorola) series -- which means the sound will be identical on both.
Obviously, when making an A / B comparision between the two, any perceived difference in sound would be caused by the difference between the Virus hardware outputs and its converters, and your audio I/O and its converters.