It's essentially emulation, so by rights it should aim to run under the same specification as the xbox 360, with the difference being that the hardware has the grunt to smooth out areas where xbox 360 hardware struggled.

The executable for the games most likely has to be modified in order to correctly run on the hardware though, which would explain why even with disk, you need to download the game and not just run it locally from the disk.

Slightly off topic but, if you're hoping to see something similar on the PS4, don't hold your breath, the differences in hardware between the 360 and xbox one, codebase wise are substantially smaller than that of the ps3 to ps4, you can blame the cellbbe for that one.

Haven't been able to test this feature for myself yet since my XBO's are back home in japan, will be once i get back though

The feature isn't available until the holidays.  The list you see now is the list available for XB1 preview members (Like me!).  We get all kinds of features first.  Months earlier, sometimes. I even got a message saying I can play the Gears of War remake, yesterday.  Instead, I decided to watch WWE and have sex with my gf!

People that take any good news and try to downplay it.  I saw it multiple times on this site, yesterday.  In fact, I think it was even in THIS thread!

Wouldn't it be a straight port then? What is emulated by the system if the file is modified to run on it?

The adjusted file is to assist with the xbox one system properly bridging between the emulated netwrk interface and achievement hooking.

So it's safe to say that we are playing with hookers. Free hookers.

I got Mass Effect on 360 up and running. It feels like its running smoother. The texture pop in which was quite bad on the 360 don't appear on here. I certainly haven't encountered it yet.

took a few early screen captures here.

http://xboxdvr.com/gamer/Digichan2006/screenshots

I wonder if anyone understood that phrase..

Ok, here is the classical flow-chart how emulation has been done, the "brute force method"  (written for X360 emulation):

1. Grab a line of PPC code

2. Translate the code into x64 code(s)

3. Execute the x64 code

4. Go back to 1.

This usually works if the emulating system is considerably more powerful than the emulated system. The Cell ppu processor at 3GHz is good enough to emulate a measly PS1/2 processor, for example.  Now in the X360/XOne situation, there is absolutely no way a 1.7GHz mobile core can do the flow chart against a 3.2GHz PPC core. So bw compatibility has to be done in either of two ways.

Idea 1: Recompile the game source code from PPC code to x64 code, essentiall a complete code conversion.

Obviously this would work, but no company is going to give MS its entire source code. And even if MS had a boatload of software engineers, this would be prohibitively expensive. Not even MS has that money left just to enable playing old games for free.

Idea 2: Crosscompile the game code and create a X360 runtime library on the XBox One system (somewhat similar to the ucsd Pascal system on the ol' Apple II).

Basically what you do is run the game code (PPC code) through steps 1., 2. and 4. and generate an x64 code file (this would be an automatic process so you don't need a dozen engineers). What you also need is a translation (not an emulation!) of the entire X360 os/graphics libs into x64 code for the XBox One. Essentially a virtualised X360 os running on the XBox One. That sounds very complex but in reality is more of a "somebody has to do it" (probably massive) workload, because MS owns the source to all of this and knows exactly where original X360 PPC calls would have to go into the x64 code. 

What is actually used of the whole X360 os/graphics libs in some particular X360 game is overseeable so I'd expect that every X360 "x64 game file" you download is roughly 0.5-1G bigger than the "original" X360 game file). But I don't have an XBox One so I have no idea if that is actually true. If not it would shoot the theory down in all likelihood.

Of course if an X360 game used "tricks" (like self-modifying code like some copy protection stuff,  using the old Kinect, maybe even some peripheral like a driving wheel, etc), then the X360 emulation would crash and burn and cannot work. Hence you won 't ever see those games. Of course if the game company wants to sell a port again on the XBox One, you'll equally not see the original X360 game showing up ever on the list.

Stolen from GAF:

https://www.youtube.com/watch?v=Pjh1Uo_xaSQ&feature=youtu.be&t=11170

"The new leadership team made the decision to invest in backwards compatibility about a year ago, they emulate the full 360 hardware level and it's running the OS, frame by frame performance, Xbox Live thinks you're on 360 so you can play with people who are on 360, Xbox One sees it as an Xbox One game so that's why Xbox One features work too, emulator runs exactly the same for all games unlike original Xbox emulation on 360 where emulation didn't scale well and they had to 'shim' on a title by title basis, emulator will be tweaked if any issues are found as they bring more games over, for 3rd party games they just need permission from publisher and then they'll run them through a QA test, Kinect games won't work, currently figuring out how to do multi-disc games."

They have likely opted for a hybrid solution, but the assumption by many that each game is essentially a full port is wrong, it would be far too expensive and time consuming.

As far as the legality behind it, in order to modify code (even just decompile/compile etc) would require a new or amended license agreement with the content owner, which is going to slow things down considerably.

If the game data didn't need to be edited and the games were being emulated fully, compatible disk based games would not need to download a digital copy and the compatibility would essentially be 50-60% of the entire library right out of the gate.

I believe there was a statement regarding  number of games never being available, this could well be because the content owner in these cases no longer exists, for companies that have closed down theres no other way to license the changes required to make the title work.