that is awesome. well done on gleaming that issue
___
Listen to Wu-Tang and watch Kung-Fu
So you can cancel the download and just continue?
Nope, you gotta download the file in order to play BC (if you have applied the November update).
So in the future when the servers no longer support these updates you' re screwed.
Not that your 360 will last that long, though. 
It's a one time download for ALL games, so it's not like you have to do it for each game. But to the larger point, since they are doing this through software emulation they can easily turn this off at any time. Thankfully I have 1.5 working original XB's (*&%^ing Thompson drive).
Time for a new Myth unless anyone wants to answer my retail question in any more detail...
Back to the retail mystery and how much of your money goes where. I was was reading the May 1996 edition of Electronic Gaming Monthly last night (to give you an idea of the period, in this issue they review Resident Evil and Super Mario RPG). In it they have an article, "Who You Pay To Play" (page 16,17,1
. In it they break down where your money goes. It was interesting reading, keeping in mind that these are 1996 dollars they are talking about.
Cartridge (SNES)
"A $70 Cart: Where the Money Goes"
$36 Publisher, $18 Retailer, $9 Distributor, $7 Developer
CD (PS, Saturn)
"A $60 CD: Where the Money Goes"
$26 Publisher, $18 Retailer, $9 Distributor, $7 Developer
Okay, so here is the deal.
= Backward compatibility has NOT been removed from the 360 with the November update
= You DO NOT have to be online for backward compatibility to work, nor is Gold membership required.
= The first time you put in a backward compatible game it prompts you to download a file, once you have done that, and restarted your 360 backward compatibility will work.
So they have probably put in something that checks for chipped 360's before they enable the feature. If your 360 is not connected by default (as mine was not) BC won't work, because you won't have the patch. After installing the patch and disconnecting from XBL I was able to try 5 games and they worked fine.