@darkcoder
Fat binaries were a way of distributing executables in a single release that could run on both PPC and 68K systems during the time that Mac were introducing PPC.
StormC for WarpOS supports a similar notion (as well as PPC only, and mixed binaries - of which fat binaries are a special case).
As far as I recall, the last OS to run on 680x0 was OS8.x. Since there were PowerMacs running this already, I can only assume they had 680x0 emulation at that point.
MacOS 9 was PPC only (IIRC) - anything 68K was emulated at this point.
The early 68K emulation didn't set the world on fire. Early powermacs ran 680x0 applications slower than the 040 macs they were replacing. That said, they were more intent on porting 68K code to PPC rather than finding out how to maximise 68K emulation.
Luckily for us, we have 680x0 emulation for our PPC systems (A1, pegasos, classic) several years later, in which time the methods used to emulate the 680x0 have advanced considerably. Thanks to JIT, even the slowest PPCs used in amigas can run 68K software respectibly. On the rather more powerful G3 and G4 based systems, 68K apps fly. I've seen A1s and Pegs run rings around WinUAE on much faster x86 systems - of course this is partially due to the fact that the OS is running native, whereas the x86 is having to emulate the lot.