Fact: Call of Duty 4 (on consoles) is not technically HD. It's 600p. Other non-HD games are Halo 3, Street Fighter IV (PS3), GTA IV (ps3), Devil May Cry IV, there are more than you'd imagine.
The point is, most gamers don't know what HD looks like. I talked to a PS3 owner who swore Bioshock ran in 1080p, because "that's what my TV says". PS3 is actually running it at 640p. Upscaling is enough to fool gamers.
So what does upscaling have to do with HD Wii?
The common complaint I hear about the idea of HD Wii, aside from Nintendo not needing to increase sales, is that it would split the userbase. People imagine HD games that old Wii owners couldn't play.
But it wouldn't have to be like that.
"HD Wii" could simply mean upscaling the current and future library to 1080p. No special HD games would have to be made, nobody would have to re-buy HD versions of their games, and compatibility with all Wii's would be maintained.

(mario galaxy upscaled to 720p)
Sure, it wouldn't technically be HD, but it's enough to fool gamers as Sony and MS have been doing for years. An HDMI Wii would launch nicely alongside Natal.










