Overall power is not a quantifiable metric. Flops is the closest metric we have.

Yes, very likely or at least a little beyond them.

We know nothing of the power of their next console other than HD will be utilized. It could 100x the Wii, it could be 10x the Wii.

Except using flops for video cards isn't a good metric since it doesn't really reflect the graphical preformance they can deliver. Video cards are better measured in texels. I have no idea how much those increase by generation, that's a hardware issue and I'm a software guy.

Are you all sure they aren't simply building this to consolidate thier existing R+d which at present is split at two locations. That would seem the most sensible.

Its not a perfect relationship but you tend to see a (rough) doubling of processing power at the same energy consumption and manufacturing cost whenever you shrink the size of a transistor in half. Moores law states that you will double the number of transistors on a silicone chip every 18 months ... If you take both estimates together you have a rough doubling of processing power approximately every 18 months, and over a 6 to 7 year period you would see an increase in processing power somewhere between 16 and 32 times.

Now, in raw terms the XBox 360 and PS3 are roughly 8 times as powerful as the Wii and 2012 is a 6 to 7 years difference between the release of the HD consoles and the release of Nintendo's next generation system. Now, using our rough estimates this would put a similar console to the HD consoles that is released in 2012 at 128 to 256 times as powerful as the Wii, and a system similar to the Wii as being 16 to 32 times as powerful as the Wii.

Whether or not Nintendo makes it to the 100 times as powerful level isn't really my point, when you move from the Wii to a console which could be 2 to 16 times the processing power of the HD consoles you really face a paradigm shift in how you develop the underlying software for your games.

They only have 1 R&D location which is less than a mile away from the main NCL headquarters.

This new land is supposedly even closer and while you are correct that they will likely move their current R&D into the new building, the plot of land purchased is over twice as large as the land the existing building sits on.  Hell, it's twice as large as the plot of land NCL headquarters sits on.  400,000 sq feet is quite a large footprint.  It looks larger than your average Kyoto city block.  The actual building footprint will probably be 85% of the total land plot based on the average building in that are aof Kyoto giving it a base footprint of 340,000.  Multiply that per floor and you have a very large building.  At 3 floors you have the size of a large mall.

Remember, this also includes software R&D, which means a lot of experiments in new types of gameplay that will later see their way into finished products made by the main team I'd guess. (Man, I'd love that job, getting to create gameplay without having to worry about the complexities of an actual game.)

If they're trying to lower costs, I just hope they remember the Skynet cost.

will this be fully functional during this gen's lifetime or will this most likely be more for the Wii 2

Land was purchased in december.  If the construction begins reletively soon then we may get some R&D benefits this gen.