Actually you are wrong about the 32-bit emulation in Itanium, Jeff7181.
On the first Itanium, and Itanium 2 up to current versions, there is a integrated hardware dedicated to running 32-bit x86 apps when it detects it. However the performance of the hardware is dismal, performing low as 75MHz 486 to 233MHz Pentium II, when the Itanium was at 800MHz.
Itanium 2 had 32-bit x86 performance that's equal to Pentium II with 2/3 of the clock speed, meaning 1GHz Itanium 2 had 32-bit x86 performance of 600-700MHz Pentium II, if such beast existed.
So after couple of years, Intel announced that they'll be releasing a software to dynamically translate 32-bit x86 instructions into 64-bit EPIC Itanium instructions. That was 2003. The result is far improved performance, with 1.5GHz Itanium performing around equal to 1.5GHz Xeon, still not enough, but much more acceptable. The software is called IA-32 EL, or Execution Layer, and it doesn't need the hardware emulator anymore.
Next version of Itanium won't have the hardware emulator, just the IA-32EL software.