Keep in mind that the wii is simply a proto-type. You can preach all you want about the wii being amazing, but Nintendo is only using it to test out its next system. Yeah its sold a lot, yeah its become a worldwide phenomenon, but guess what? All they are doing is setting the groundwork for the real deal. Ninty had gotten far away from the media with the N64 and GC, but now with the wii, the name nintendo is back out there. You can count on countless soccer mom's and grandparents buying their next console solely on whether or not it says 'nintendo' on the box.
Its hard to say where Nintendo will go from here because there are so many options. They could go with the classic helmet that is portrayed in virtually every attempt to skepticize about a virtual gaming experience, or perhaps they'll go with motion sensers that you stick all over your body, portaying your movements on screen. Who knows, maybe we'll still have a controller next gen.
However, I do expect Nintendo to be on par with (for the sake of discussion) the PS4 and XB 720 graphically. Seeing as they've done all the hard work already (in thinking up the wii and making it happen) I think this is a reasonable request. Can you even begin to imagine a wii with the XB360's graphics?
Next Gen is incredibly promising.