It's worth mentioning that the original Xbox had an Intel x86 architecture processor, whereas the 360 uses PowerPC architecture. That alone makes compatibility significantly more difficult, as the CPU needs to be emulated unless an auxiliary processor is added to execute the older object code format. That's quite a few extra cycles even with a JIT compiler, and a significantly faster (than the original) chip would be needed to provide the same level of performance. That the Xbox 360 is backwards compatible at all at a reasonable speed is fairly impressive. The Wii uses a higher clocked but otherwise very similar PowerPC processor to what was used in the Gamecube, as mentioned before. Even the graphics chip is a higher clocked version of the original. There's almost nothing to emulate or reimplement, aside from slowing the chips down. The PS3's Cell CPU is an extension of the PowerPC architecture aside from the SPUs, which is not at all the same as the PS2. However, there is hardware in place to run the older MIPS-based code (and presumably translate the graphics calls if they're that different.) I'd imagine the Wii's successor should have an easier time providing backwards compatibility via software, given that Nintendo sticks with a PowerPC chip. Graphics calls are relatively easy to translate efficiently at a high level in comparison.
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