I don't think the x86 Jaguar in PS4 is powerful enough to emulate the Cell. Besides using a totally different architecture, Cell is also twice as fast in terms of clock speed, and if I recall correctly, actually outperforms Jaguar at certain tasks.

As much as backwards compatibility is convenient, i'm happy both MS/Sony moved towards x86. I'd like to hope Nintendo will move towards the same standard architecture as well, but i expect they will keep themselves isolated in their own unified ecosystem :/

If both Sony and MS stick with x86 (like i hope they do), we could potentially see it make a return in the 9th gen.

Know what would be cool? If PSNow allowed you to play games you already own. Like say if I wanted to play Shadow of the Colossus I would just put the disc in and stream it over PSNow. Would that even be possible? I am not too tech savvy when it comes to stuff like that.

Would the PS4 be powerful enough to emulate the RSX? If it is then you'd just need to put the Cell in an external device and have it connect to the PS4 and have access to the PS4's I/O and AV-Out subsystems.

The Cell probably costs only around $25 these days so they could sell a power base converter for like $60 and make profit.

My gut feeling is that yes, it should be able to emulate RSX, as it's GPU is much more powerful in pretty much every metric, but I'm no expert in emulation tech so I can't be sure. 

It would certainly be possible, but i expect it's an issue of cost. Sony will be/are spending a lot of money building the servers and streaming the games, so doing it for free would cost them a lot.

It would be nice if they could meet people in the middle though. Maybe give you a few "free" game redeems or discounts etc, something of that fashion.

PNow could potentially be the perfect replacement for backwards compatibility in the 8th gen, but we will have to wait and see how things go with the pricing, both at and following the launch.

I actually doubt it, the GPU in the PS4 (equivalent to a 7870) has trouble with emulating PS2 games at times, let alone PS3 games. Of course, the CPU would still be doing the most heavy work in emulating either the CPU or the GPU I would expect, and the Jaguar can't come close to handeling the amount of tasks needed to emulate RSX right now.

I was kinda hoping they would let you use digital games for free in PS Now, like if you bought Uncharted digitally, you can stream it for free on PS Now. It would shift people towards digital, giving Sony more profits, while at the same time making people who only have the dic version choose to either buy the digital version or just rent it.

It sounds a little cut-throat keeping disc users out of the equation, but not all PS Now devices have disc drives.

It's harder than you think ... I don't think we've ever emulated a programmable GPU before except for the original xbox. Some may argue the PS2 as it's vector units did closely resemble a vertex shader and while I agree that there are a lot of similarities but that part ended up ultimately being emulated on a CPU. 

I highly doubt that an HD 7870 is troublesome for emulating PS2 games ...