If games run in progressive scan, then so do the DVDs. If you have your Wii set to 480p, then it's outputting in 480p, even if the game is not, it's still technically being "upscaled", but you will still probably notice interlacing in said game. DVDs are all 480p (unless it's encoded improperly, or recorded from a VHS or another interlaced source), so if you had your Wii set to 480p, they'd play in 480p as they were meant to be. It's kind of like how your monitor may be set to 1280x1024 at 85hz, but you might be playing a game and only getting 15FPS, but the video card is still outputting 85hz.