There's no reason why they couldn't be played (eventually) - the output resolution will be downscaled but they should still be viewable. I have an old PC hooked up to an SDTV with S-Video, and I play HD files all the time. The video card outputs to the TV and I watch them in SD.

The files themselves aren't "p (progressive scan)" BTW - the display does that.

This is actually a good question - does/will WiiMiidia support progressive scan? Or does setting it in the Wii settings handle it for all apps? Does/Will it downscale HD files?

Also glad to hear you got your infectus. Let this be a lesson to everyone - get an infectus BEFORE you start experimenting with system menu stuff