Not going to pretend as though I'm fully sure. My biggest concern could be the CPU. I think GPU wise, it should be alright. But I use a lot of executables that are compiled for different CPUs and OS and they work fine via VM. I dunno, I may not fully understand it, but I think it should work, getting good performance (or how they would get it) may be another topic.VM or directX can't really help against a race condition or other obscure bug linked to execution speed, or some cache behaviour issues?
It could be a good idea to have a robust compatibility mode as a fail safe. It doesn't have to be applied to all unpatched games, just the untested ones. As they get tested they can flag them off the compat list in bulk.
When concerning whether or not MS or developers need to be involved, if I understand BC right, it's MS manipulated.
To that extent, I imagine that X360 to XBO is a much greater difference than XBO -> Scorpio. They could be spending the next year prepping patches for all games. But it doesn't sound like it.
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