i was at EB games and i overheard the guy say that he sells his entire shipment of Wii's (12) within 40 minutes of receiving them. It says its been like that with every shipment.

I think there are several issues at play here.  First, this along with the 360's critical launch shortages are why video game companies used to launch in Japan first, then NA 8-12 months later, and last in PALand 4-6 months after that.  Gamers and retailers may complain that Nintendo isn't supplying enough consoles but they are closing in on 7 million sold just after 4 months on the market, has any other system come close to having that amount of demand?  Secondly, I think Nintendo may have tapped a wider market than they could have ever imagined.  It seems they are having a cascading demand "problem" where they supply 1 million consumers, each of whom shows the Wii to 2 friends who then also demand it.  So each month Nintendo is supplying 1 million but creating 2 million new consumers demanding it (yes those are made up numbers, just an example of what I think is happening).  Adding in the already larger market the Wii is tapping and it further explains the demand problem.  Lastly,  $250 is in the range of possible non-holiday purchases.  Most game systems are expensive enough during their first year that sales slack off after Jan or Feb allowing for retail inventory and then holiday inventory to be rebuilt.  The Wii doesn't suffer the price limitation and so hasn't seen the normal drop off in demand.  BTW, I do think that because of the PS3's much higher than typical price tag that it will do much better this holiday than current sales would indicate because its price limits it to a holiday purchase for more people than usual.