Quote from Skjalgjust for the record, this will not be an issue, at all, for microsoft to make, or for a windows 8 machine to handle at the same time as running the java vm, playing quake, solitaire and pirates of new horizons in internet explorer on 4 different screens. You gotta keep in mind that the xbox 360 hardware is old as fuck, and it wont surprise me if a lot of the xbox 360 can run on windows phones in 3~5 years.
Considering ps1 games made the leap to handheld devices (PSP) in almost exactly 10 years(1994-2004), and since the 360 is nearly 6 years old now(released nov 2005)... I'd say you're pretty close on that prediction! The biggest issue would be controls. A huge chunk of games are eliminated right off the bat because there is no feasible touchscreen control scheme. Most games nowadays don't scale down like that very well.
I had a SMB rom on my 1st gen iPhone... and it controlled like shit. Not an issue of hardware capability. It just sucks mashing imaginary buttons that are on top of the screen.
But on topic, I have no doubt that Microsoft could put a 360 emulator into Win8, and have no issue running on most modern computers.