Windows 8 does have a lot of challenges with the ARM processors, most of them related to compatibility with x86 instructions. While this is going to be a big issue, I do think that Microsoft knows about this and plans on some kind of emulation on both fronts. They wouldn’t segment the Windows ecosystem, they seem to be trying to do the opposite.
So what does this mean? That Office 2010 someone bought for $120-350 or that Sims 3 Pets game you bought for $29 in September of 2012 will not run on a ARM-based Windows 8 tablet or notebook. This doesn’t mean that WoA platforms won’t have applications; they will. Microsoft has gone great pains to develop a new application development environment where developers can write new Metro Windows 8-based applications using a new and slick Visual Studio developer app. That doesn’t change the fact that none of the legacy apps will work.