It had been speculated that the problem was with Nvidia owning the way the current Xbox chipset works. And since Microsoft have defected to Nvidia's arch rival ATI for the 360 GPU, it would be very difficult both technically and politically to have Xbox games work on the 360.
Well it now seems Microsoft has agreed to pay Nvidia royalties in order to allow the ATI chipset on the Xbox 360 to emulate the Nvidia chipset's performance for certain Xbox games.
The term 'certain' is used because patches will be required for some or maybe all games, and these patches will be either included on the external hard drive, or available for download.
So now we know how - emulation and patches. But we still don't know which or how many games will be supported, or how good the emulation will be.
Hopefully we'll know all the details before November...

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