Some new spec rumours today, apparently it'll use a proprietary 'disc' system with a 25GB max capacity, no HDD but 8GB of flash memory in the console.
Doesn't sound right but it is nintendo so I wouldn't be surprised if there is a curve ball in there like the game 'discs' having their own memory for saves etc like they were working on for the SNESCD addon, but 8GB of local storage definitely doesn't sound right to me. Even a few wiiware titles would quickly use that up. But at the same time It wouldn't be like nintendo to use a conventional HDD for local storage.
The proprietary disc system sounds about right though given nintendo's love of proprietary storage (the wii is the only nintendo system to not use such a system)