Should they buy capcom or the resident evil series or maybe buy  sega or make a online service like xbox live?

They should do what they think is best to continue to make more money. Hopefully, short-term at least, this involves more fun new IPs and sequels on both the DS and Wii.

They should buy Square Enix.

the question itself
is
very
very very good according to me


they should think a lot for their next hardware : how to make us different from the 2 giants of "$".

not sure how sony is a giant of $ compared to nintendo when nintendo has a larger market share than sony now and is the 2nd largest japanese company (sony is like 5th)

It seems to me that Nintendo has a bigger profit margin than "Big Oil" LOLZ... PLZ Don't Flame me! (I am j/k about that, but it could be true... I don't know the numbers...)

Nintendo should be and probably already is looking forward towards the next big thing. They should also ramp up Wii production with all that fat cash. A few new IPs would be great for short term and for long term. Disaster: Day of Crisis should prove interesting.

Really though I trust Iwata-san and Miyamoto-san to do the best thing. They have proved that they have the entire industry's best interests at heart. They will continue to do the best/right thing, imho...

Don't buy any company. They have enough first party studios with plenty of IPs and their relationship with third parties is getting much better due to the Wii's success.

They should invest a good bit of the money in advanced R+D so they can put out another console at a low price point next generation.

The online system also needs to be completely retooled. Just toss the FC and create gamertags already. Set up a system like LIVE with voice chat.

I dont think they should buy any company's outright but investing and buying about 20-30% of the shares of key companys would be a good move by them.

definitely improve their online services, but the thing is that doing that isnt really a money issue, Nintendo just doesnt want to do it.

 Investments, propriatary property, reasearch and development, global power and just overall roots are why people insist Sony is a "bigger" company, and in that aspect I agree completely. 

On topic, I have no idea :P They should ask Blizzard what to do with the money, they seem to have a lot of it that's seemingly going nowhere :/