at a lower res you will be able to put more things on screen and better pixel shader effects all things being equal .Why? In other words, what does SD get you over HD (all other factors being equal)? Are you expecting framerates to be different between say the Xbox360/PS3 vs. the Revolution? If they're not (let's say all 3 manage to hit 60fps) then SD is inferior, period, right?
So nintendo can release an xbox 360 lvl system in late 2006 for most likely less than the xbox 360 cost in late 2005 and to the majority of users the image will look just as good or better considering how few own hdtv sets now and in the next couple years .
However once 2008 or so hits there will be enough hdtvs out there that its smart to have that support. But if nintendo can price itself right it may not be affected .
On a side note my friends and I were talking and we are undecided on how to buy the 3 systems .
I personaly was thinking xbox 360 now , ns5 next year adn wait to see whats the deal with bluray to buy the ps3 . Some of my friends were thinking x360 and ps3 and wait till later in the life of the ns5 to buy it .
However if the x360 is 300$ and the ns5 is once again 200$ and the reports of a more expensive ps3 unit are right. Many pay pick up the ns5 + x360 and wait on the ps3 .
So it will be interesting to see what happens .