Now that's emulation, because PS1, PS2, and PSP are all in MIPS. PS3 is Cell, not MIPS. So either emulation like PS2 classics which translates MIPS to Cell, or hardware backward compatibility like early PS3 Phat which added actual PS2 chips onto PS3.
Wii U and Wii are neither. Since they all use PowerPC 750, they can run the code natively with minor software support.
Wii games are still rendered in 480p then stretched to 1080p. The reason people are saying that vWii looks good is because it can do HDMI output from the source (no signal degradation).
Similar approach is used on PS3 and Xbox 360, renders the game in 720p then stretched to 1080p. I don't know about Xbox 360 but PS3 do apply some basic upscaling filters to it.
Nothing beats having TV or receiver doing upscaling for you, unless you plan to invest $600+ video upscaler.