FPGAs let you program in logic gates and flipflpos. An 8051 or PIC processor is just a bunch of logic gates and flipflops. Witha a standard 8051 the logic is hard - its built out of silicon that you can't change - and you program in software. With an FPGA you have another level of programmability. In the FPGA the logic is soft - you can change it whenever you want. So first you program the logic that is the 8051 into the FPGA and then you can write software for that soft 8051. On that sme FPGA you can program in a PIC or a PIC and an 8051. You can see why FPGAs are so cool. Xilinx has a free tiny microcontroller designed for its FPGAs supposedly you can program in more than 10 of these little processors on a single average size FPGA.
The FPGA insn't simulating the 8051 or PIC in the way that a PC does. PCs execute one instruction at a time. To simulate an 8051 it just executes those instructions fast enough to make the result like an 8051. FPGAs are parallel. Everything happens at the same time. An FPGA makes an 8051 in the same manner as a silicon chip, with some significant differences but the result is the same. You can take the same VHDL that is the 8051 and build it in silicon if you wanted.
There is free 8051 VHLD and Verilog code out there. This code will make the FPGA behave like an 8051 - the instruction set will be the same. FPGAs are cool because you can add whatever you want to the free VHDL. You can design your own processor if you feel like it.