Awesome, some competition might kick both companies off their butt and get a reasonable amount of good games on the market.
Well I don't think they are ditching backwards compatibility. They are replacing the ps2 hardware with software emulation which will suck because not all the games will work. The XBox 360 has this issue since it does the same thing. Only maybe 300 original XBox games work on the 360 and I think Microsoft stopped working on the backwards compatibility bit.