This from the Neogaf gaming forums. Umbrella Chronicles definitely has the most realistic graphics on the Wii yet. RE4 looks great as to be expected. More to come.
Update on Umbrella Chronicles:
The graphics will be done totally in real time on the Wii; also you will be able to look around with the Nunchuck's analogue stick to find clues and secrets. When you are doing certain "moves" with the Wiimote the game will switch to 3rd Person view so you will be able to see your character on screen during these moments of non shooting action. Capcom has also said that Umbrella Chronicles will serve up plenty of scary moments, so this is not just a "House of the Dead" that looks like a Resident Evil game. I'm looking forward to it.