The 3DS downclocks the ARM CPU and disables its second core when playing a NDS game. As a side effect, battery life is better when playing DS games on a 3DS than when playing native 3DS games on the same 3DS.
The 3DS processor is capable of emulating 8-bit systems, as it has virtual console NES and GB/GBC games. SEGA also ported some Genesis games to run on the 3DS, but I think they had to re-write parts in native ARM code as straight emulation wasn't fast enough (Google "Sega M2 GigaDrive" for a great series of interviews about this).
The 3DS processor is capable of emulating 8-bit systems, as it has virtual console NES and GB/GBC games. SEGA also ported some Genesis games to run on the 3DS, but I think they had to re-write parts in native ARM code as straight emulation wasn't fast enough (Google "Sega M2 GigaDrive" for a great series of interviews about this).