That's not a good screenshot for comparison. A few shots of those cars racing in daylight against a very elaborate cityscape background might provide a better comparison. The XB360 & PS3 are simply more technologically advanced than the Wii when it comes to 3D rendering and relevant technologies (pixel shading, surface mapping, etc.). If for example, Bethesda were to take its hit rpg Oblivion and attempt to bring it to the Wii the results would (visually speaking) extremely disappointing. The Wii simply doesn't have the CPU horsepower or the 3D feature set needed to run a game like that with all its bells and whistles turned on. When discussing the graphical merits of the latest consoles it comes down to advanced, cutting edge technology (XB360/PS3) versus state of the art, off the shelf components (Wii). The former will consistently allow for better looking games but the latter costs far less to manufacture (and can be sold at a far lower price). Not that the Wii is hopelessly outclassed, Nintendo seems to be placing a helluva lot of emphasis on its revolutionary controllers.

I think the driving forces behind the Wii realized that for most people, good graphics are good enough and one need not break the bank creating and manufacturing a state of the art console capable of displaying astounding graphics. Even if an age where style seemingly triumphs over substance good gameplay always seems to beat great eye candy. Take a look at the phenomenal success of World of Warcraft, a great looking game but positively primitive looking when compared to games like Prey or Oblivion. However 6 million subscribers paying $14+/month to play WoW online think those graphics are just fine.