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It's still hard to decipher the backwards compatibility message from Redmond.

One of the rumors floating around is that backwards compatibility will only work with a hard drive, which would have left Core systems out in the cold. As it turns out, that’s only partially true. In many cases, the hard drive will indeed be necessary because you’ll need an Xbox emulator file to sit on the hard drive (it’s still unconfirmed whether this emulator comes pre-shipped on 360 hard drives but it is highly likely the case) and make your Xbox games 360-friendly. However, our understanding is that this isn’t perfectly foolproof, and that it may not work in every single case.

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