The bit I got the other day was that the Wii GPU has full hi-def capabilities even if they are not exposed.
The reason you don't see it is twofold, the fact that the console can't really push HD rez at reasonable frame rates and the fact that it would cost more. The latter will probably become a moot point with the first Wii refresh but the former problem is really here to stay.
What it comes down to is that the Wii may be the best console out there, but don't look for 1920 * 1080 games pushing full rez. If anything, SD or maybe widescreen upscaled is about all you will see, but for me, I just want HDMI outs."
Link to story
This doesn't surprise me that much seeing that the original Xbox could do 720p resolution. Could a more simple game like Wii Sports 2 be a 720p Wii game? We'll see.