Solution: Buy a better HDTV.
Sorry.
Ironically for most people who currently own a HDTV and have this problem, "better" means buying a HDTV with a lower native resolution.
There is no such thing as an input lag. All flat screens just lag to some degree because of the technology behind them.
What you do will happen in realtime on the Wii without lag. You just won't see it happening on your HDTV before many frames after it's actually happened.
Upscaling signals happens at the HDTV's input level, and that's where the lag happens. Olevia and Vizio are notorious for having the worst input lag out of all HDTVs. Not all flatscreen TVs have input lag. All flat screen TVs have a response time yes, but that's a ghosting issue that's really only seen on plasmas.
So it laggs even if you play with component cables and on 480p? Melee always lagged a bit on my HDTV. Not much but it made a difference. I thought the 480p support on Brawl would solve the problem. Apparently I was wrong. Also, how does a VGA box solve the problem? Is an upscaled VGA signal not laggy, or does the box upscale to a HD res through VGA at a really good speed? Also does it get really hot because of this?
BTW, I think the US version of Melee had 480p but the European version didn't.
Also I'm totally pissed off with the lack of HD support on the Wii. My PS3 looks great on my TV.
A VGA box upscales a 240p/480i signal to 480p with no lag. So yeah, you're upscaling to a HD signal without lag. When a HDTV upscales a 480i signal, what we see is trailing behind by about 6 FPS, sometimes up to 12. When upscaling from a 480p signal, it's only about 1 or 2 FPS, so it's not that bad. The most strenuous process of upscaling for a HDTV is converting an interlaced signal to a progressive signal. You can see how beneficial a VGA Box is here. It doesn't output too much heat either (the ones that I prefer anyway).
Well yes, the Gamecube can output in 480p. The problem here is that the more recent model Gamecubes don't have a port for component cables. Composite cables carry interlaced signals, so it's great that the Wii is finally around.
HDTV manufacturers were supposed to implement some sort of new technology to upscale 480p signals without lag two years ago, but as you can see they're late on their promise.
Last I checked from Samsung, they said their game mode decreases input lag by up to 30%. That still kind of sucks depending on your TV.
Hell, the XBox, a previous generation console, supported up to 720p. I guess Nintendo just trails behind that badly. There was that crap with N64 cartridges, then online play, and now signal output.
I personally play all of my games on a CRT, but all of my friends have HDTVs so...that sucks haha.
So the easiest solution is to play on a CRT, or use component cables. If only everybody had a component cable... Great for your own home, but what about other people's houses? It's a pain to get behind those TVs.
What about those who play other games like Guitar Hero or Melty Blood? I know a lot of you don't solely play Smash. Luckily Guitar Hero II and III support 480p. For those who play 480i games, play on a PS3 (backwards compatibility issues), use a VGA box, use VGA cables (Dreamcast only), and use Game Mode.