Yeah, MS isn't really doing emulation, they are implementing the Xbox API. The PS2 does true emulation of the PS1 hardware, registers, clocks, etc. Not a bad way to go, actually, it just requires work for every game, so compatibility is maybe. If they had delayed the launch until the API was fully implemented they could have guaranteed compatibility.
It's the same Microsoft BS, release it now, download the patch later.
Nate