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The successor to the Xbox 360 will not feature backwards compatibility. During the Microsoft conference today, Microsoft has gone on record saying the system will not be backwards compatible for 360 games. As for the original Xbox games, they couldn't say. Also MS confirmed that the "always online" DRM is an affirmed negative. You do not need to be online to play a single-player game. You do however have to be online to play Xbox Live and/or when streaming, for obvious reasons.
Perhaps we will see if this makes any sort of difference this fall.
360 Owners, what do ya'll think of this news from Microsoft? Are you furious? Are you unmoved? Let us know in the comments below.