As far as I remember, graphics have always been the biggest sinlge selling point of a system in western countries at least. Japanese have always favoured gameplay and style over realistic graphics, but very few in Europe or America do this. First BIG exception to this rule, the great success of the DS. Second, the great success of the Wii. Nintendo pushes playability, but from the NES to the Wii, graphic power has not been their main advantage (SNES, N64 and GC being closer to that approach, which did not make them much money). I'm happy to see Nintendo pushing playability again. But I'm also sorry to see that great productions might be seriously cut this gen due to the low costs of developing for Wii, which is going to be the leader if nothing radically changes in this market. So far what I've seen in Wii is below average quality of Gamecube games (I own both consoles), and that's a bit insulting, since even if not much more, it is for sure more powerful. I trust Nintendo will push the hardware, but, will third parties do it? Most will not, we'll see zillions of bad ports from the PS2 as they already started flooding the catalog. And that's sad for the industry.

Actually, graphics have never been much of a selling feature on systems, after all the Sega Master System was more powerful than the NES, the NEO-GEO was more powerful than the SNES and Genesis, the N64 was more powerful then the Saturn and Playstation, and the Gamecube and XBox were more powerful then the PS2.

Certainly, graphics has been the main reason why people have moved from one generation to the next but it is not the graphics that are motivating people; they  have bought into a new generation because the games have "improved" dramatically and it is a new (cool) thing to own.

Considering the awesomely insane Wii sales, no, its not very important

I like better graphics of course who wouldn't game play is a must though. But to say people prfer the cartoon look is false people are not buying the Wii because they don't care about graphics. It's because the extra money they would have to spend for a 360 or PS3. if grapics didn't matter then PS2 and X-box would't have mopped the floor with the gamecube. If graphics didn't matter what happened to nintendo until the Wii ?

On to the other topic of Final Fantasy:Spirits Within the CGI in that movie were outstsnding and still hold up very well today 10 years after it was made . The problem with that movie was it had absolutely nothing in common with any Final Fantasy ever made.

And lastly if a level of realism is not what people really do want why has there been so many generations of video console the hardware for the most part is designed for better graphics and AI. Hell even Nintendo didn't need to make the Wii in your opinion. Couldn't they have released a motion based controller for the Gamecube? is there anything in the Wii's console hardware for motion sensing? I am fairly certain all of the motion sensing is read at the controler and sensor bar level right? I wouldn't call the Wii a fad but I think its way too early to call it a trend.

I think the best example of what you speak of is Motorstorm. The game is sexy, Ill admit it. It was really great graphics. Amazing. But the game, in my opinion, is simply borring. Its litterally realistic to the point of being dull. Excite truck on the other hand, ALSO has really good graphics, not as good, but still good, but purposely has bad physicals (turning and spinning in the air) and yet I have never played such a fun racing game. The game is fast passed, with big air and crazy stunts. It may not be HD, but its 50x as fun as MS.