Ahh this is the second reference I have seen with respect to the Cray 1.
Why, may I ask, create a simulator ?
Because you learn more by writing a simulator for something than reading about it. You have to visit many of the same decisions the original designer(s) made and that gives you a greater understanding (and appreciation) for their choices. And here you'd be learning from a master! And simulating a Cray one is bound to be far more interesting than simulating an x86!
Why not do THIS !
Sure, that'd be more fun if you have the right skill set but this is *much* harder for most people!
A friend of mine implemented a PDP-11, various peripherals, Galaxy game graphics controller etc. on a similar Spartan 3E FPGA boards (Digilent Nexys2). May be I will suggest this to him but you are talking about a serious amount of work even if you are very bright!