I thought SMS looked magnificent, especially in the water effects (possibly the best in a game yet). Sure, it could've looked better in some place, but "underwhelming" is most definitely not the term I'd use for it. Animal Crossing had underwhelming graphics, but then again after 10 minutes you didn't care what it looked like, it was so fun.
Aside, though, I completely agree with Ian- I'm so sick and tired of people saying graphics don't matter, and gameplay is the only thing that has any importance. Yes, gameplay is by far the most important, but just because you have good gameplay doesn't mean you HAVE to have bad graphics- it's like how everyone assumes handicapped people are nice. Graphics go a long way towards drawing you into the game's world, to take from your living room staring at your TV to actually being in the game, fending off enemies. Graphics set the tone and mood for the game, and can greatly heighten how you feel about certain characters or scenes. Gameplay is indeed the most important aspect of a game, since a bad game with good graphics is still a bad game, but a lot of people downplay the role that graphics do play in a game. The best games find a perfect harmony of stellar gameplay and extraordinary graphics, like Metroid Prime, Eternal Darkness, or Wind Waker.