Yes, Windows has made a reputation for backwards compatibility and it works surprisingly well. However, it's not perfect and it only goes so far. I know there are a lot of companies out there still running Windows 95 because their software doesn't work on more advanced versions. Also, what have Microsoft given up for this compatibility? Its my understanding that Windows source code is a huge mess which has made updating it a large project. Just look at the control panel for the most recent version of Windows; it's a mish-mash of styles and layouts.
