It added an ARM7-based 32-bit CPU on the top of the Z80-based 8-bit CPU used by previous Game Boy models, allowing for full backwards compatibility with the entire Game Boy (GB) and Game Boy Color (GBC) software library (aside from a few games that used GB/GBC exclusive features, mind. The Game Boy Advance (GBA) was essentially the true successor to the original Game Boy line launched in 2001.
Currently it does not let you play CDr discs or control video mode, but it's still a fantastic achievement.