Form factor changes (like the DS Lite and DS XL) offer far more value to portable devices than they do for a home console (especially for one that is already as small as the Wii); and the DSi added on functionality that was already available for the Wii, and similar kinds of functionality have been added on through Channels, Wii Ware and peripherals.
Hypothetically speaking they could increase processing power; but (for the most part) this is difficult to do without starting a new generation of consoles. Essentially, it is possible for Nintendo to “super charge” existing hardware so that there was enough processing power to play the same games as the Wii at 60fps at 1080p (possibly with polygonal tessellation and texture up scaling); but this offers little value for consumers being that no games would be produced to take advantage of the additional processing power, and little value to developers because they couldn’t take advantage of the additional processing power.
Or to put it another way, the only meaningful hardware change Nintendo can really do at this point in time that would have a significant impact on sales is to launch a next generation console.
