I was inspired to write this after an inquiry by Peter on talk.origins about a genus of Cambrian craniate found in the Chinese Cambrian-age shale of Miantanshan. The early evolution of our own phylum isn't a subject that is often brought up on sbp, with most of the discussions over paleontology on this newsgroup dealing with mammals, dinosaurs, birds and the like, with a large percentage of that being mammals (specifically Early Cenozoic mammals) due in no small part to my passion for early Cenozoic paleomammalogy.
With that out of the way, let's get on to the meat and bones of this post. The early evolution and ultimate origins of our own phylum, that is hordata, is a hotly debated topic among experts, and many details are likely to have been lost to time, but we do know a few things for certain. One is that we are ultimately part of a clade, a so-called "super-phylum", shared with echinoderms, acorn worms, and a bizzare, relatively obscure and sadly now extinct phylum of Cambrian-era animals, that is the Deuterostomata, characterized by their mouths being on the front end of their body and their anal cavity on the other end.
We also know that early chordates lacked bones, and even early vertebrates/craniates possessed cartilaginous skeletons rather than bony skeletons. We also see the ultimate origin of our own brain, the human/vertebrate brain, in these early chordates, as they started to undergo the encephalization of their heads.
While most early Cambrian vertebrates we have on record are/were relatively fragile, with one being able to see the myomeres on a number of Cambrian vertebrates, Zhongjianichthys might actually be transitional in regards to the density of its skin and its backwards facing eyes, features that are more advanced compared to the other craniates of the era, but this may also be the result of convergence, since studies of the paleoecology of the shale Zhongjianichthys was found in suggests that Zhongjianichthys inhabited brackish water, so the backwards facing eyes may have been to help it see better in these conditions, since this was deep, brackish water, not just some ordinary estuary or salt marsh. The thick skin might've evolved to help protect Zhongjianichthys from predators, although these features are not necessarily indicative of convergence, it may be that Zhongjianichthys or a close relative of it was the ultimate ancestor of all of today's vertebrates (hagfishes are iffy, some studies place them in Vertebrate alongside lampreys, while others place them outside Vertebrate, but still inside Craniata, being a sister taxon to every vertebrate on this planet; references below), it's ultimately hard to tell since the evidence is ambiguous if Zhongjianichthys's intermediate traits were the result of convergence or not.
Kuraku, S.; Kuratani, S. (2006). "Time scale for cyclostome evolution inferred with a phylogenetic diagnosis of hagfish and lamprey cDNA sequences". Zoological Sciences. 23 (12). doi:10.2108/zsj.23.1053.