Looks like Chris Satchell, General Manager of Microsoft’s Game Developer Group is in controlled release mode. Doing controlled release of the fact that Microsoft is not going to bother about Xbox 360 backward compatibility for too long.
I was just reading a Gizmodo post about Satchell predicting that by 2008 Xbox 360 backward compatibility would be a non-issue. Microsoft obliges, as usual! Here is a quote from the forums of Xbox-scene (caution – there are some real trash talking teens out there!):
“At some point we’re going to focus less on it,” he said. “When you get to the end of this year there will be a reduced focus on backwards compatibility. There are so many 360 games out there. I don’t know if it’s important anymore.”

My 5 year-old son is hooked on several E-rated games on the original Xbox console. For unknown reasons, Microsoft never came out with backward compatible versions for most, if not all, of these games. My read on this is that the selection process for these games was probably based on some survey of Xbox Live or general sales volumes of titles. Most of these games are rated either Teen or Mature, probably reflecting the highest demographic of game players. But Microsoft tends to forget that children probably form the second largest demographic.

My original Xbox console recently gave up the ghost and stopped working. After long conversations with Microsoft I was told that if I would have to pay upto $175 to get it repaired. My intention was to get the Xbox repaired so my son could play his old games that would not work on our new Xbox 360. He loves many of the new games on the 360 including Marbles, Bejeweled and even Uno! But he still yearned for his old favorites like Tak Attack, Scooby Doo, and others. I finally found that my local Microcenter store sold used Xbox consoles for between $100 and $120. There were no warranties and I took a risk and bought one for about $115. Now there is a happy youngster and a somewhat apprehensive dad, waiting for the console to pack up.

And now, of course, we hear that Microsoft is going to yank whatever little is left of this backward compatibility humbug. I read some of the comments on the Gizmodo article about how much worse Sony is. I could be hardly bothered because the only Sony gaming device I have is a PSP. All I can say is that after investing in nearly 40 games I will not have any options in case my second Xbox console dies on me.