QFT.
Graphics are important, but when I say graphics I don't mean realism, I mean art style. Twilight princess has a brilliant manga feel to it, wind waker was a beautiful game. Thats what makes the graphics of those games immersive.
I think the argument is more about the developers than the wii itself. The wii has enough power to warrant wonderful graphical styles for games, but it appears that some developers haven't bothered to make the game look as pretty as it could.
Yes, we all know the wii would be far better if it had ps3 graphics as well as the innovative controls...but for now its either one or the other, and I choose controls.