Next-Gen Xbox To Lack Backwards Compatibility?

An anonymous reader writes "Biz news site Gamesindustry.biz is reporting that Microsoft's Xbox 2 won't be backward compatible with games for the current Xbox, and quoting 'sources close to Microsoft's senior Xbox executives' explaining some of the thinking behind the decision. All very cloak and dagger, although I guess whoever told them would probably be in line for a firing if they found out... So, is Microsoft right or wrong on this one? Have any Slashdot readers ever actually used the backwards compatibility on their PlayStation 2?"