Any Arduino will do this fine. The Megadrive pad is pretty easy.
I'm assuming you want the challenge of doing it yourself so here's an extract of information.
= = =
I didn't think there'd be anything of interest in hooking this up to an Arduino, but it does have one unusual characteristic: one pin (Select) is used to choose between two sets of readings. i.e. With Select low, reading from pin 6 gives you the status of button A. With Select high, pin 6 gives you the status of button B. Cool!
Pin Name (Select=GND) Name (Select=+5V)
1 Up Up
2 Down Down
3 Gnd Left
4 Gnd Right
5 +5VDC +5VDC
6 Button A Button B
7 Select Select
8 Ground Ground
9 Start Button C
Here's the pin layout of the port on the controller, stolen from pinouts.ru.
Nowt fancy needed here. Just shove wires into the holes and connect them to digital pins on the Arduino, pin 5 and pin 8 going to +5V and Gnd respectively.