You can play games solely on the controller, which handles like a tablet and presumably includes the stylus we saw interacting with it during the reveal. It's got a 6.2 inch screen, is backward compatible with all Wii games, Wii Remotes and other accessories -- a video showed showed it being used with the Balance Board and as a Wii Remote, so it's got motion controls built in. An example during the reveal showed an individual using it in a golf game, just like a Wiimote.
It's got rumble, trigger buttons, bumper buttons, a touch-screen, microphone and speakers, and an accelerometer. It's also got a camera built in. Iwata says it's got support for the "widest variety of games can be supported" and can play games independently of the Wii itself. Oh, and it's HD.