"So, it looks like they basically sandboxed older apps, and in fact the entire OS 9 to run on top of MacOS X. Sort of like runnine E-UAE now on OS4, or WinUAE on Windows, although they made it appear more seamless, I think. "
Apple actually did a good job with this. When flakey ass 0s9.2 would rear it's ugly head.... just force quit the os9.2 app and viola. What a relief not to have a crash bring down the whole system. The whole way it ran 68k, and PPC on the same system was quite well done.