it would require not just replacing ALL art
Not really ALL art. Just all 3D art. Which is a lot, sure. But as they say, polygon 3D models can be converted to voxel models, so conversion would be immediate, it would just take a time to actually make it look good.
How can we make new art for such a system?
There are already free voxel editors out there... not sure about polygon->voxel conversion tools.
Looks very interesting though. Although I'd love the haha effect when I get the first Wii game featuring remarkably better visuals than any polygon PS3 game ever had.
I wonder what they'll do about real time shadows though.
Edit: There already appears to be a free (?) alternative (sourcecode is released): look
here! The demos are just awesome, you can bomb away the complete world once you found that red blaster. Also, vast improvements appear to have been made in
this modification (couldn't run those demos though). Sure, the voxels are a bit large if you get close, but I'm sure it will be improved.
Edit2: What I also like about those voxels is that collision detection is perfect. No bounding boxes, no more sitting on air
