AFAIK Wii's PPC CPU should be a lot more powerful than the almost equally clocked Celeron/PIII hybrid used by XBox 1, but Wii has only a little more total RAM (*), so while extra CPU power is available for new features like motion control, little more RAM, of which a portion is used by the aforementioned new functions, could force it to have little more graphic detail. Obviously, considering that only towards the end of this gen HD TV sets will have a WW diffusion comparable to old SD, Nintendo decided to invest only on widely and readily usable new and appealing functions instead of on a costly graphic quality increase that could have been enjoyed only by a minority of users for quite a long period. Facts are proving it right. When necessary and desired (or maybe simply taken for granted when HD will be widespread) by a more consistent share of users, Nintendo will be able to release a Wii2 with higher def spending a lot less than what it costed this gen to its competitors.
I'm not saying MS and Sony were wrong pushing technology and graphics, but graphics aren't everything and what Nintendo created is perceived as a greater innovation than the usual computing and graphic power increase.
Edit: checked (*) Wii has actually little more total RAM, but quite a lot more graphic RAM, but 24MB are still in a low end range (although enough for SD graphics).
