As I said in another thread ... The combination of a low quality and low quality graphical assets makes it very difficult to see the potential from their tech demo.
The Wii's TEV unit is very similar to colour combiners that were included on graphics cards before companies moved towards programmable shader hardware; they were (generally) never used to their potential because programming for them was manufacturer specific (and often card-specific). Many tech demos that took advantage of colour combiners had graphical effects that weren't possible until shader hardware became more powerful.
What these guys are trying to show is that you can achieve material and lighting effects which are (somewhat) similar to what is possible on the XBox 360 and PS3; this isn't to say that they're anywhere near to the quality of the XBox 360 or PS3 effects but they're far beyond what has been produced in most Wii games so far.
