You know, looking back, the graphics aren't that much worse than Sonic 06's back when we saw it at TGS '05:
Hell, I'm sure the Wii can replicate Sonic 06's graphics (at least at that stage of development) at least at 30 frames.
Remember how Sega was proud to show that the game ('06) can display grass the way it did? Looks like the little white console can do that as well.
Really, how was that such a big deal again?
Oh and the mushrooms on that tree bit...
Though we did (most of us at least?) thought '06's visuals were really something back then, maybe not as much now?