Old technology becomes new as ‘lock-on technology’ has been reported to feature on the Xbox Live Arcade version of Sonic & Knuckles, according to Netherlands Sega Online Website which holds pictures of the feature in action. This would allow you to couple Sonic & Knuckles with any of the previous Sonic XBLA titles to unlock their ‘& Knuckles’ feature. The lock-on feature was missing from the recently released Sega Mega Drive Ultimate Collection.
Sega developed lock-on technology for the original Mega Drive/Genesis cartridge as a way to basically split the game in half to release two Sonic games in 1994. Combining Sonic & Knuckles with Sonic 3 created ‘Sonic 3 & Knuckles’, basically the complete version of Sonic 3.
Sega were also able to make Sonic & Knuckles work retroactively with Sonic 2 placing Knuckles as the sole playable character, something that was never though of on Sonic 2’s release in 1992. Finally coupling Sonic & Knuckles with the original Sonic game gave you access to a vast number of ‘Collect The Blue Spheres’ special zone
No news is available regarding a release date for either Sonic 3 or Sonic & Knuckles on XBLA at this time