As far as I know much of the built-in WP7 apps are already native. Not that switching the kernel makes much of a difference to MS. But there are also third-party native apps as well and those would be affected.

For the most part though I think that supporting an implementation of the current runtime on the Win8 kernel wouldn't be impossible. And as for C++ I guess that they could always expose WinRT as a development platform going forward along with the current .NET subset. But I think it is extremely unlikely that Win32 would make the jump.

There would be no need for any emulation layer or virtualisation as all win phone apps are essentially compiled into a subset of .NET, which is designed from the ground up to be platform independent. You just need a runtime which executes the bytecode (Common Intermediate Language or CIL in the case of .NET). The fact that this bytecode is running on an 32-bit arm CPU with a Windows CE kernal or even an Intel i7 with Windows 7 should be totally transparent to the app.
How the "Special" apps written with microsoft's blessing in native code will cope is the only question.

The reason is supposedly for "native" (not really, but closer) access to the hardware in place of DirectX. This is in response to developers wanting better access to 3D and audio hardware, and sometimes using alternative API's like OpenGL/AL/CL which supposedly offer this already (they don't, but that's the opinion by some developers).

Also, remember that ARM hardware is more compatible with OpenGL ES than Direct3D. Although it would require a re-compile, native C++ support would offer more optimized performance for each platform. C# is easier to code and offers better cross-platform compatibility, but has big performance tradeoffs that game developers aren't willing to accept. This is why there aren't any games that run on .Net CLR.

All I can tell you is that I've not personally heard about this. It seems far-fetched to me, however, that Microsoft would abandon a managed code language like C# for an inferior, early-generation OOP language like C++. Them adding support for this language is one thing. I find it hard to believe that this will be the new preferred dev language in any capacity though. Just my opinion, of course.

Paul, there's a lot of talk that C++ support may be coming to Tango, which would lend credence to Mary Jo's info that C++ is going to become the preferred dev language for games on Windows 8 and Windows Phone in favour of XNA. If that's true, then it sounds like the backend stuff in Apollo is going to be relatively boring and Microsoft may be accelerating development to make Windows Phone features on par with Windows sooner.