HD will be a partial factor. As (I have probably mentioned a few too many times now :>), I have a "old" HD set - but its reasonable small (82cm?), and the Wii looks fantastic on it - perfect for my living room.
I don't think its as much about HD, as it is about TV size. When most people have huge sets (100cm+), then these low resolutions start to have a more significant impact. But the timing is still pretty good for Nintendo - in about 4 years time, a lot of people will have these sets - and Niintendo will be ready to release the Wii2.
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When I say emulate the Wiimote, I consider the "pointing" functionality critical. In a lot of ways, this sets the Wiimote apart from other devices because it fundementally changes the way you select objects on the screen. The one vrs two-handed concept is also pretty fundemental.
Gesta Non Verba
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