Now that I have seen it on my own screen (32" HDTV), I can safely say that this game easily surpasses Super Mario Galaxy as Wii graphics king.
I shouldn't be so surprised - images and videos have been circulating the web for some time now, and Capcom has recently started talking very favourably and proudly of their new Wii efforts.
But christ, this is one of the few games where compressed internet video does not do the game justice. Those were not bullshots, the game really does look like the screen above.
What you can not see, for example, is that many surfaces are normal mapped (such as the wooden tiles above, and the water). That the characters have dynamic and self-shadowing all the time. That all on-screen characters are influenced by the many dynamic light sources around the maps. Maps that offer a fair amount of destructability. Lots of the little things that are a given on the HD consoles, but seen very rarely if at all on Nintendo's white box.
And the polycount of the characters - the bosses in particular - is beyond anything I have seen on display on the Wii.
It's still a Wii game, it's still fixed at 640x480 and you will not see a single sharp texture (or very detailed normal map) in the whole game. And certainly lots of its shine is due to the fact that the developer is in control of the camera the whole time. But it's impressive nonetheless.
The gameplay might not be up there, I don't know yet; I'm having fun so far, but its definatly not as user-friendly as Extraction. I'm looking forward to playing (and seeing) more of it.