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The Wii, as it stands, is not incapable from displaying at HD resolutions.

What's the actual story on this? This is the first I've heard of the Wii being able to do HD, but all along I've found it a little hard to believe that it really can't. Even the PS2 could do HD if the developers wanted it, and we know the Wii supports 480p. Could it just be a matter of developers finding a way to program efficiently enough to leave a little hardware room to bump up the res?

Even if you assume that everyone who has a Wii uses it on their main TV, and everyone who has a HDTV is repulsed by the Wii's SD graphics, that means that 50% of the market is still willing to buy the Wii. It is likely that neither of these assumptions is true so the Wii can still (probably) sell well to 80% of the market in 2011 without HD support.

Though I don't agree with the OP's analysis, these numbers are off. Twenty-eight percent of households already have an HDTV. Conservatively, 60% will have one 2 years from now, and by 2011 they'll be virtually everywhere.

While I'm a fan of Nintendo and what they've accomplished with the Wii, they dropped the ball on this one. HD support should have been a top consideration in designing the system.