Nintendo Announces Wii Wireless Router
CVG reports that Nintendo has announced a wireless router, the purpose of which is to "streamline the process of getting your console online." It will be released later this month in Japan. No word was given regarding when the rest of the world will see it. Pictures of the router are available at Famitsu, though the text is in Japanese. 1Up also points out statements from Nintendo execs discussing the limited storage for the Wii. They say there will be a "better solution" than a hard drive.
See what I did there?
Are you referring to the Nintendo DS, which still supports WEP only (as far as I know)?
The Wii has supported WPA from the get-go. The Nintendo Wifi USB Connection (now discontinued), supported WEP for the DS because the DS supports WEP only. Many sites recommended it as a cheap and easy way to activate and deactivate a quick wifi network for your DS without stepping the whole network down to WEP (although I'm unable to tell if it uses WPA for Wii-only communications when using the default Nintendo application).
As it is, though, the Wii is plenty happy to connect to a WPA or WPA2 network.
As for better than a hard drive, I'd imagine that simply fixing the firmware to allow for "merging" the internal flash and a simple 4GB SD card would work just fine.