According to an interview with Johnny Chung Lee (known for his experiments with the Wii remote), the Wii remote's hardware is actually very good. It's the programmers that are still getting used to interpreting the complex motion data and implementing it better in games. Motion controls will continue to improve with time in the software.
Listen to the interview:
The Wiire podcast episode 93
Visit Johnny Chung Lee's web site:
Johnny Chung Lee - Projects - Wii
"As of September 2007, Nintendo has sold over 13 million Wii game consoles. This significantly exceeds the number of Tablet PCs in use today. This makes the Wii Remote one of the most common computer input devices in the world. It also happens to be one of the most sophisticated. It contains a 1024x768 infrared camera with built-in hardware blob tracking of up to 4 points at 100Hz. This significantly out performs any PC 'webcam' available today."
He has a few videos on his site which show really cool projects and capabilities of the Wii remote.