I believe that Nintendo is (pretty) far into the development of their next generation hardware, which will have (more than) enough processing power to produce HD graphics, but I don’t think that they are aiming for a 2010 release; and a 2011 release is questionable. For a company which is reliably producing multi-million selling titles for a system that is (roughly) as powerful as the N64, and another system which is (roughly) as powerful as last generation consoles, there is no immediate need to push for new expensive hardware.