Now that it's been announced at E3, I can finally reveal that the Xbox 360 feature I work on is... Xbox backwards compatibility!
Yes, it's real. It's been fun to watch all the wild speculation over the past year or so as to whether the Xbox 360 would or wouldn't be backwards compatible. And all the wild ideas about how hard or easy it would be. It's clear that a lot of people have very little understanding of how these things work.
Were I forced to speculate, I’d expect some kind of JIT-compiler like the x86–on-Itanium IA32EL or the x86–on-Alpha FX!32 is involved. I can’t remember the old rule-of-thumb for emulation – was it that you should have a processor ten times as powerful as the emulated processor to reach parity? Of course that was for state-machine-based emulators, where essentially each instruction was executed in turn by emulating instruction fetch, decode, execute, retire.
Whether a particular Xbox game runs on Xbox 360 will depend on just how closely the assumed-JIT and its library emulate the original processor and, of course, GPU. Hopefully the fact that Jet Set Radio Future was a launch title and was bundled with some consoles (e.g. mine!) will be taken into consideration!