I put in Shenmue II over the past weekend and I gotta say, it has aged poorly. Not just graphics, but the delivery of the lines, the animation, the scripting, I mean just about the whole of it. It was pretty painful to realize since I hold these games so close to my heart.
I think rather than get a 3rd game with the first two getting HD releases, it wouldn't be a bad idea to just start it over again with a remake for the first two games AND the third part, all rolled into one game. Go ahead and trim the fat from the first two games as well and make it a more streamlined and focused experience.
I know some of you might call blasphemy, but I think its a legit idea and a good way to get NEW players interested and KEEP them interested rather than trying to get them to play through the old stiff games that can't hold up to the new stuff they're used to playing.