Those who tend to care a great deal about graphics are those who spend a lot of time online, looking at pictures, watching videos and discussing games. Since the Wii's release everyone has highlighted how successful it's proven with people who previously didn't play games or people who played very little. These are exactly the demographics that don't care about graphics, they don't spend a great deal of time researching gaming and possibly don't even know that the Wii is "underpowered".

The average Wii fan is extremely casual (I suspect that the average 360 or PS3 owner would be less casual - although still casual) - and therefore they just don't care about graphics. It's a non-issue for them, it rarely factors into buying decisions and developers know this - it is why low cost software can sell really well on the Wii but would sell very poorly on the other systems. Wii owners who care a great deal about graphics (and perhaps to an extent production values) are a huge minority.

Onyxmeth is correct in what he said. Even Nintendo knows that you can shift a lot of software to these demographics without investing a lot of money in them. They bundled a game like Wii Sports, which is technically unimpressive and yet has driven a significant amount of sales. For many Wii owners Wii Sports is their first experience with a game, it's what they expect from gaming and it is graphically unimpressive. All up you have a situation where there is reduced incentives for developers to invest in games that push the Wii graphically.

Or Chronicles of Riddick, or Odin Sphere, or Shadow of Colossus. I may as well throw in those as well.

Most of those games were made at the end of their respective console's lifecycle, and the Wii is barely halfway. There is plenty of time to see improvement.

The xbox was simply a flattened PC. The Wii Hardware ist far more complex, for example the Wii has no shaders but TEV. TEV are more powerful as shaders but hard to handle for newcomers.

The overall graphic quality of third party Wii-games has increased in 2008 and in 2009 we will see graphically impressive Wii-titles even from third party.

@Picko: You jump into conclusions in a little too straightforward way, or atleast look at the thing from the wrong direction. But, you did point out the developers/publishers mindset extremely well.

Even when graphics aren't the reason to pick Wii over 360 or PS3, it doesn't mean it wouldn't be a reason to pick a game by graphics inside the platform in the same way it is with PS360.
Also, you should notice how Nintendo is dealing with graphics; Wii Sports/Play/Fit which are simple games have simple graphics, while SMG, which is propably the most complex 1st party Wii game, has the most impressive graphics on the system. Now 3rd parties look at Wii Sports is a game that sells and its graphics level and assume people buy games with the same graphical level, which is true up to this point, and then they look at SMG and see another game that sells, so they take graphics from Wii Sports and put them in a complex game like SMG. Now, on paper this may look like a win-win situation, but in reality they make a game too complex for the Wii Sports audience and graphically too shitty for the audience who would like more complex games.
As you mentioned production values, think production values in the sense as it forming a square. One side is graphical level and the other is the games complexity. When both of the values are drawn so, that the squares all sides are equal, you basically have a winning formula. If you increase the value of complexity, you need to increase the value of graphics etc. You can also notice people to complain the games on HD consoles being too short, due to the twisted production value relation.
What the values are, is just something that bases itself into the experience of the publishers/devs.

Guys, don't take anything away from the XBox. Don't praise the Wii at the expense of the XBox. There's no point in saying the XB graphics would look worse if they (Wii and XB) had the same resolution. It's not the XBox's fault.

Okay, just one thing.

It takes time for a console to grow to its peak achievements. You are comparing 4th year XB games with 2nd year Wii games. To get a valid comparison (in power) you would have to compare a 2003 XB game with Super Mario Galaxy.

I don't know if the Wii is stronger, and honestly - I don't care. I didn't buy the console for the graphics - heck, I find Twilight Princess as one heck of a beautiful game (better than MP3 for instance) and it's a 6th gen game.

First picture I found - http://cubemedia.gamespy.com/cube/image/article/615/615739/the-legend-of-zelda-twilight-princess-20050517110420000.jpg

That's not so bad, is it? I'm happy with GC graphics, quite frankly.

No. As a matter of fact, the original Magnavox Odyssey had better graphics than the Wii.

As others have no doubt pointed out

Graphics improve over the life of the console for various reasons

Metroid Prime 3 has better graphics than anything the xbox has to offer, so yes, the Wii is more powerful

3rd parties have been lazy with the Wii in 2006/2007 and much of 2008. We're starting to see games like the Conduit and alot of other 2009 games that show the power of the Wii

@Whomever posted those open-world Smg pics. Take a look at Conkers if you want a decent comparison. Furthmore, that wasn'teven MS num. 1 game(unlike ninty) at the time.

@Scottie Halo 2 and Doom 3 look better than MP3.