True, and you make good points. The 360 emulator is just that, an emulator. It's like the 360 emulators they have for PC. It just emulates the 360 and the one I used, you could use a rom of a game, or have software that reads the disc of an 360 game in your DVD drive and it'll load up to launch the game.
What you're referring to, I believe, are roms, which you just rip the contents off of a disc, and compress it into an iso file, and run it using a virtual drive, which technically, the 360 would be said virtual drive. This would explain why you can just download the disc onto your xb1 and play the game without the disc in the bluray drive. The system is downloading the files from the 360 disc and writing an iso file for it. Regarding better servers for matchmaking, I'm a little lost on that one.
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