The important word for Wii's graphical capabilities is TEV (Texture Environment Unit). Don't forget that. When developers talk about making a game for Wii they never ever mention the TEV unit in the Wii. They only say it can't do some of the things the original Xbox could do, like shaders. They are very wrong though and they need to go back to Gamecube school (or talk to Factor 5's Juilan Eggebrecht) to find out that even the Gamecube could do everything the Xbox1 could do, only with a different method. The Xbox1 worked similar to a PC, so if developers made a game for it they would make it like a PC game. They couldn't do that with the Gamecube since developing a game on Gamecube was completely different. Custom shaders, custom lighting, custom textures - custom everything. Xbox and PC follow a code that most developers know and its not all custom. They have programmable shaders, like Shader Model 2.0 for instance.
The Gamecube has the TEV and that allowed for games like Starfox Adventures and Rouge Squadron 2/3 to have texture compression, Light sourcing and advanced shading for graphics that were considered amazing for the time they were released. Go back and play Star Fox Adventures again and tell me that it doesn't still look awesome, and it was released 5 years ago.
The same applies to the Wii. Developers don't want to have to make a game from the ground up for the Wii when they can just port over PS2 games with PS2 graphics and add Wii controls to make a quick buck. When they release a game on all systems they don't use the 360 version because they can't do it without re-writing the entire game all over again for Wii to make it look similar. It's just too much work for those lazy devs. Using a PS2 engine for a game is a lot more easy since the Wii can do that in its sleep.
The Wii does not have Shader Model 3.0 and it doesn't have the power to run it, but it can produce custom shaders with the TEV that look almost exactly the same but have no name other than "custom". You can see this in Super Mario Galaxy. Basically all you can do is look at the game and ask yourself if it looks as good as high level shaders in other games, I'm sure the answers will vary. Mario Galaxy definitely has the best shaders yet in a Wii game and many people from various sites have said that the game looks so good that its on par with many Xbox360 games.
The Wii has S3 texture compression for incredibly detailed textures on walls and surfaces. Only 2 games on Gamecube used this technique and they were Geist and Timesplitters 2. No games on the Wii use this yet, but they are coming.
The Wii also is capable of the Next-Gen Motion-Blur that is so nice in games like Gears of War and Lost Planet. It remains to be seen how much of this effect we will see in Wii games if it is being used with other effects turned on.
We don't really know the Wii polygon pushing power, but we do know that it has to be more than Gamecube. Remember that the Gamecube was no slouch with polygons, Rouge Squadron 3: Rebel Strike accomplished 20 million fully textured, light sourced and shaded polygons at 60 frames per second in the famous "Escape from Hoth" level. Many people think Resident Evil 4 was Gamecube's limit in power, but I think it really was Rebel Strike.
Here is a quote from an IGN interview with Factor 5's CEO Julian Eggebrecht on the Wii's power and developers being sloppy:
IGN: Resident Evil 4 was a beautiful GCN title. Rogue Squadron was doing things at launch that developers still haven't done on Wii. Why do you think that is? Are studios getting sloppy on Wii?
Julian: Yes. I'm so disappointed knowing exactly what the Wii can do -- and I still think nobody knows it better than we (no pun intended) [laughs]. I really have to say, boy, am I disappointed! They all have finally figured out, five years into the hardware's life cycle, how to do at least basic shaders and a rim light, but that's what everybody does. But I still don't see enough bump and normal-mapping, if any. I still don't see enough post effects, although you would have insane fill-rates with Wii. I don't see any of that. I was digging out Rebel Strike the other day and was looking at it, and we had some people who were visiting ask, "Why isn't anybody else doing this on Wii?" And I am at a loss. I really am.
So basically the Wii can look very similar to the Xbox360 in terms of graphics in low-res 480p when a game is made by a developer that actually makes the game knowing the Wii's strengths. You can't go into making a game on the Wii thinking that its a PC or an Xbox, because if you do you won't be able to make games look as good as you want. The developer willl come away thinking that the Wii just isn't capable of doing things like Shaders, Normal Mapping, Motion-Blur, detailed textures and Bloom lighting-when it absolutely can. I'm not saying the Wii will look exactly the same as 360 in the future, but I am saying that we haven't seen what the Wii can go graphically by a long shot. The system is capable of every Next Gen effect out there, maybe it can't do all at once but it can do them all to a lesser degree at least.
Look for Super Mario Galaxy to fully expose all these developers when it actually does all things graphically that Third Parties have said the Wii cannot do. Its too bad we only have 1 true game to prove this(Metroid Prime 3 is close) but I'm sure we'll see more in the future. Factor 5 needs to show them all how its done and Capcom needs to bite the bullet and release Resident Evil 5 on the Wii.
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