An official notice from Larry 'Major Nelson' Hryb has revealed a major update to the Xbox 360's backward compatibility list, including newly working Xbox titles such as Psychonauts and Shenmue 2.
The full list of December 2006 Back Compatible titles added or updated are as follows:
Buffy the Vampire Slayer
Burnout 3: Takedown UPDATED
Conker: Live and Reloaded
Dead Or Alive Ultimate
Destroy All Humans!
Dynasty Warriors 4 / Shin Sangokumuso3
Evil Dead: A Fistful of Boomstick
Ex Chaser (Japan Only)
Family Guy
Far Cry: Instincts
Fahrenheit/Indigo Prophecy
I-Ninja
Leisure Suit Larry: Magna *** Laude
Mortal Kombat: Armageddon
MotoGP
Incredibles/ Mr. Incredible (J)
Muzzle Flash (Japan Only)
MX Unleashed
Open Season
Pariah
Plus Plumb 2 (Japan Only)
Psychonauts
Psyvariar2 Extend Edition (Japan Only)
Rainbow Six: Lockdown
Rapala Pro Fishing
Rent-A-Hero No. 1 (Japan Only)
Scarface
Shark Tale
Shenmue II
Soul Calibur 2 North America only
Splinter Cell: Double Agent
Tenerezza (Japan Only)
The SpongeBob SquarePants Movie
Ultimate Spider-Man
Wakeboarding Unleashed: Featuring Sean Murray
Whacked!
Winback 2: Project Poseidon
Xiaolin Showdown
The update to allow more Xbox games to run on Xbox 360, which is now available over Xbox Live, was heavily rumored after being accidentally posted on the UK version of Xbox.com. That notice was posted and then removed, without the actual software update being available, but both confirmation and the code update is now live and downloadable.