GamesIndustry.biz has an article about the issues with the backwards compatibility on the 360 and it is because the XBox used an Intel chip using the x86 architecture and the XBox360 uses IBM chips based on the PowerPC architecture.
So to run an XBox game on the XBox360 the game has to first be recompiled for the new architecture. I don't know how they are going to roll the games out, but I don't think it will be as simple as putting your old game disc in the new console.
EDIT: I later findout that is all Bullshit.