I really don't agree with you. They made one om the most amazing Gamcube games. They're a very talented developer, especially graphically. Lair, bad as it may have been, looked pretty good imo.

I would love to see them getting amazing graphics out of the duct-taped machine, especially a game like Kid Icarus, that doesn't really have a fixed design and style, so they can design it the way they want. 

 Be assured that gameplay wise Nintendo will have a lot involvement since it's some kind of mythical title, that will have enormous hype, so I wouldnt worry about that. Kid Icarus was a damn hard game on NES and I hope it will stay a mature game. A kind of mix between Zelda and Metroid and the old NES game would be brilliant imo.

If Nintendo hands one of their franchises over to Factor 5, it better be Star Fox, not Kid Icarus. Star Fox seems right up their alley, though I'd fear it would loose the on-rails portion and focus on the all-range mode missions. Of course after the previous two home-console entries, I hope it's set primarily in the air/space and not have Fox out of the Arwing for more than half the game.

If it is being made I would much rather have Nintendo developing it, but Factor 5 is better than nothing I suppose.

I didn't even finish them, because I was so disappointed... from the very beginning, these games felt like Nintendo had given Capcom a "Legend of Zelda" tool kit, and Capcom produced a remix of "Link to the Past".

After that, I skipped "Minish Cap" as well.

No offense... but maybe it's because you're 10 years younger than me :) I started playing Zelda in the 80's on the NES... it's my favourite series. But these parts seemed stale and out of place.

 You mean Factor 5 making good motions controls is impossible? I really think people are over-reacting to the whole Lair thing. I believe Factor 5 thought they could fly around the moon with that game, and were just too proud, and too deep into the dev cycle, to admit it wasn't working like they hoped. Has Nintendo never made a stinker? What about Capcom? Konami? Everyone makes duds.

People shouldn't be getting so worked up.  It's only a rumor after all.

As I said over at GoNintendo, if Retro isn't making Kid Icarus, then what are they working on?

I love the Metroid Prime games and what Retro has done with the series. But everyone was assuming that Retro was working on Kid Icarus, and a rumor to the contrary comes out and everyone's puzzled that Retro isn't working on it. I don't assume that this rumor is coming true, but it's the most credible(in my book) Kid Icarus rumour that I've read. AMN/Kombo is a fairly reputable site, and for them to say their source is reliable makes me listen a bit more than I do for others. Let's face it, Kid Icarus rumors are pretty much a dime a dozen these days, but they usually don't come from sources like this, in this manner. This isn't the usual rumor reports you see on sites that start off with something like "The internets were on fire today with rumors of..." 

In other words, this is about a (potential)Kid Icarus game, the first (potential)game in the series in about 17 years(potentially or something). I'll be concerned about Retro later. Besides, it's not like this is official word from Nintendo, for all we know Retro could be working on Kid Icarus right now. Then again, maybe they're working on a Urban Champion remake.