Proprietary hardware at this stage isn't possible (unless its already supported by the Wii hardware).
We can move channels & VC games to a SD card now (I have all my "old" VC games backup up on SD), so I really don't see what the big deal is.
It should be trivial to add this as an extra "cache" for the main 512MB memory. The process would go something like this:
- on boot-up, the Wii checks the SD-card, and builds a directory list of apps/files on it. This in itself may need to be cached on the Wii for speed, but its not *that* hard to do.
- some apps are tagged as "channels", meaning they appear directly on the channel menu (ala apps in the 512MB of RAM)
- whenever you run something from the SD card, it does a little memory shuffle. This could take a few seconds, but it would only happen the first time you run something. The Wii could pop up a little message saying "Please wait, reshuffling memory"
- if there is space on the Wii memory, the app is copied from SD to Wii memory.
- if there isn't, the last unused app(s) are copied from the Wii memory to the SD card. This space is then cleared, and the SD app is copied to the Wii memory for running.
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I imagine from a technical point of view, the real issue is that the Wii is *only* capable of executing code within its 512MB internal memory (haven't seen the technical specs, so not completely sure). It may not even be capable of this - apps may have to be "preloaded" (uncompressed/unencrypted) from the 512MB into normal memory, then run. Similar to how running apps from Wii disc would work.
In fact - I really can't see how a SD card (or a USB hard drive) is any different from a Wii disc media. They are both encrypted.
It might be more of a "channel" issue than anything - with a Wii disc, its only ever *one* app at anytime - so the Wii disc channel only needs one slot on the channel menu (etc).
With a USB/SD solution, the problem is that the media could contain HUNDREDS of channels. They might need to implement a "SD card channel", which then opens up a new set of channel pages for the media in question. Access speed is still an issue though.
...
Regardless, its all very solvable - and with only software upgrades. The SD card solution seems ideal to me for now.
A Wii HD hardware upgrade also seems to be an excellent commercial solution - they can keep cranking up the HD space, and releasing newer models. Releasing a Wii with 2-4Gig (internal) memory would also be a nice solution.