Nintendo Wii will be the first Nintendo console ever with extensive built in software. It will have emulators, download manager to download news etc and possibilty to seamless extend the system with like for example the Opera browser to allow to browse regulare web pages. And it will also have the option to download and view videos from Nintendo with new video player, and file manager because the memory card now can take many things, including videos, VC games, saved data, game contant and much else.
Obviously, you can hear that all this is very expensive to make and put in the console. How could Nintendo cut the cost? It's very simple. Simply Wii will have software based on a industry standard platform that's open source. Linux. You read that right. Wii will have Linux as operating system with proprietary GUI and applications based on commonly open source for Linux programs. This probably make you all think of homebew and hacking and things like that, but the final system in closed and will allow only signed code etc and will be very secure, even though it's technically compatible with a world of already existing software. You can count on a lot of 3rd party add ons, much like Opera. By default, Wii will not have a window manager, but a easy to understand and simple interface, similar to what other consoles have. Underneath is a powerful and stabel Linux kernel which keeps it all solid.
The system itself will put on the 512 mb memory stick integrated in the system and its hidden and cant be removed from the console. So there is no risk for removing the system software. The memory card make the system start up very quick, and if you hold A on the Wiimote while starting Wii, it will automaticaly start the game in the DVD without booting Linux, and you can also set up this in Settings so it always starts automatically. But by default, it brings you to a menu, similar to the Nintendo DS menu.
Remember that the games will not run on Linux, but on a similar propritary platfrom like other consoles also use.