(Didn't see anyone covering this so I might as well do the honors)
Taken from MS homepage: XSX BC with thousands of games at launch
Backwards compatible games run natively on the Xbox Series X hardware, running with the full power of the CPU, GPU and the SSD. No boost mode, no downclocking, the full power of the Xbox Series X for each and every backward compatible game. This means that all titles run at the peak performance that they were originally designed for, many times even higher performance than the games saw on their original launch platform, resulting in higher and more steady framerates and rendering at their maximum resolution and visual quality.
In partnership with the Xbox Advanced Technology Group, Xbox Series X delivers a new, innovative HDR reconstruction technique which enables the platform to automatically add HDR support to games. As this technique is handled by the platform itself, it allows us to enable HDR with zero impact to the game’s performance and we can also apply it to Xbox 360 and original Xbox titles developed almost 20 years ago, well before the existence of HDR.
Techniques such as the Heutchy method, which enables titles to render with increased resolutions up to 4K, or applying anisotropic filtering to improve the final image quality bring these classic games up to modern standards, better than ever before.
The compatibility team has invented brand new techniques that enable even more titles to run at higher resolutions and image quality while still respecting the artistic intent and vision of the original creators. We are also creating whole new classes of innovations including the ability to double the frame rate of a select set of titles from 30 fps to 60 fps or 60 fps to 120 fps.
The team also continues to listen to feedback from the community on additional titles you would like to see added to the compatibility program. Resurrecting titles from history often presents a complex mix of technical and licensing challenges, but the team is committed to doing everything we can to continue to preserve our collective gaming legacy.
Just to be clear. The quote above says they will continue listening to community requests for backward compatible titles, so not all games will make it to BC list.
I must admit, I'm not interest purchasing XSX but this is awesome news for console gamers, even I say BC is more important for those who hates switching consoles just to play previous games. If MS price XSX right, I can see this becoming more attractive for consumers in the long run.