Some games do have issues with the BC emulation. I've tried playing Red Dead Revolver (which looks like a pretty fun western) but like you I'm having major graphical issues that are detracting from gameplay. Your best bet to find out if a game has issues is to search the official XBox.com forums for the game in question and see what pops up.
Wow, I'd never been to the official XBox forums before. What an complete mess!
I had the same thing with Thief - weird lights showing through the walls. Most everything else has been fine with the occasional glitch here and there.
My main problem is that the lights show through people as well. So you have guards walking around with what looks like a torch burning in their chest because of the glitch. Think I'll just track down the PC version instead.