I don't understand why there are still shortages for the Wii after 1 year.  Sure its christmas and all but I should be able to go to a store and buy one without trouble.  Last weekend I went to 3 different gaming stores and also Circut City, Best Buy, and Wal-Mart.  They all told me the same thing.  The Wii's dont come on the regular shipping truck, they come through UPS and they come in on random days.  Now I know that Wii's are selling really good but Nintendo's other system, the DS, is selling even better.  But, there are no DS shortages. In fact every store I went to had plenty to choose from. (I bought 2 of them)  I don't understand why Nintendo won't meet the demand for the Wii.  Its not like the Wii has advanced hardware that is hard to produce.  In fact the DS is probably more advanced just because if its size.  My only guess is that they are trying to keep the interest for the Wii high by making it unavailable. 

There have been tons of discussion about this.

- It's hard and expensive to increase production.
- Only Nintendo knows how hard exactly, but supply chain management in general is not a simple thing.
- Nintendo is carefully trying to understand how much they need to increase production
- Has any other console ever been produced as fast as the Wii? They're producing 1.8 million per month right now.

Does sandbagging mean "increasing their shipments to 1.8 million per month" or "producing many more units than their competitors combined"?

well being sold out from day one and dmand extremely higher then u can make is the reason. the ds at first wasnt a sell out like the wii is. so they actually got a supply before it exploded with popularity.

They've had a year to incerase shipments and their just doing it now. Again, the DS sells more and there is not shortage.

 Yes, but they also just released the DS lite, and sales have been very strong since then.   

Unfortunately that is a common perception but nothing could be further from the truth. Wii does use advanced hardware in the controllers and that's just one of the production delayers. In fact the Wii is being produced (and sold) at an unprecidented rate. 1.8 million are made monthly and that's still not nearly enough.
Nintendo is making them as fast as they possibly can, and we expect production to continue to increase, but that takes time especially for a company like Nintendo that doing own a ton of factories like Sony does.
DS is easier for them to produce and I believe they are making 2.5m a month which has been meeting demand (except in Japan) but demand seems to be increasing and this may become hard to find to.

Two comments:

1- They have increased production two or three times. I could look up the sources for you, but I don't feel like doing it.

2- The DS is smaller, cheaper, probably simpler to produce and has been in the market for longer.

They've doubled production but it's still not enough.

I wouldn't say the controlers are the problem. I see a lot of those in stores. No shortages there.