There is *nothing* extraordinary about the Wii being able to READ DATA from a SD card. Its no different than reading from any other port.
However - I very much doubt the Wii can *execute* code directly from a SD card. It would need to be loaded into the main memory first (i.e. 24MB internal RAM).
No different from running any application - the Wii loads/decompresses the app from the 512MB Flash RAM into internal memory - then executes it.
...
I believe the challenge for WiiWare/VC from SD cards is this: When the Wii reboots, it scans the 512MB Flash for a "directory list" of applications installed. Extending this functionality to the SD card is actually non-trivial, and could add significant 'reboot' delays.
They may have to write a specific "SD card browser" channel, which runs as a little application of its own. There could be some other clever solutions.
Gesta Non Verba
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