JIT, is basicly a Dynamic recompiler. One cannot just convert the who 68k code into PPC code (or x86 or whatever) in one go because there is no way the recompiler can know how the code is actually going to run (condtional branches, self modifying code etc...). So the JIT has another solution it only recompiles upto the next branch. and then executes the code block of code that has been recompiled. When it reaches the brance it can then jump to there the branch pointes to and recompile that block upto the next branch. It can do this untill the entire program (or at least as muh of the program that has been executed) is converted into the native code :-) Simple really.
An interprative emualtion just emulates each instruction. No recompilation occures. even if the emualtor is only executing teh same three instructions each one has to be emulated each time.
