I don't think this rumor is true… However, it makes sense to simply upgrade the Wii and to keep that brand name with their next console, if you really think about it. Here's why:
1. Nintendo doesn't have to start from zero with their next console, nor will they have to fight to establish their product with the masses that already accepted the Wii as a brand name. I mean, the Wii went mainstream in ways the PS2 never did. (I.e. It became the first console to be at the Oscars; became accepted by quite a lot of Hollywood celebrities and featured in many TV/Cable shows; it branched into new demographics that never before considered playing videogames; etc.). So there is a good reason to keep that brand name and to exploit it's popularity and brand recognition. It would be foolish to drop the name at this point in time.
2. The Wii brand is also synonymous with motion controls. It is with the great majority of consumers that have tried said technology or that are familiar with it. That is a great advantage over the PS3 and 360, which will need to convince new consumers that their consoles also offer motion controls. THEY have to start from zero in that arena. Nintendo does not. Unless they drop the Wii name, that is.
3. A system upgrade seems the best option considering that it is safer for Nintendo to take such strategy. Because if the upgrade were to fail (doubt it), they could quickly announce the release of the actual system that was to replace the Wii. Thus saving face from the hypothetical scenario of failing to capitalize on the Wii's success.