not very many people, at all, have access to Verizon's FiOS Internet service...it's only available in the very large cities (this is also most likely why the latency is so low with it too).
The ethernet adapter will, indeed keep bandwidth more steady and it will have lower latency (not to mention, it won't be near as unstable as WiFi).
Connecting your Wii directly to the modem? This only isolates the bandwidth to the Wii only, and thus, it gets all the packets; if there's other PC's in the house, it'll definitely help, but if you have 2-3 PCs (and your Wii), and you're the only one who plays the Wii, just connect it to the router; home routers will hardly ever be under enough load to decrease their latency, after all, they don't even use a routing protocol; they just forward everything out a default-route (which is the WAN port in this case).
The whole video conversion thing is not a huge problem, what's more of anissue is the TV itself (that said, when TVs do conversions, it does add to the latency). I know I'm not going to make many people happy with my next statement, but....CRTs are still the best of the best in the TV world; the only thing that flat-panels have against them is size and weight....CRTs still have the best clarity, picture quality, colors, longevity, and latency. Sadly, there's not a whole lot of HDTV CRTs out there...though they did make them in the past (I've talked with a couple of people, and I've seen one myself...and the Sony KD 36XS955 CRT HDTV is awesome). I've seen Super Mario Galaxy, Metroid Prime 3: Corruption, and Star Fox Adventures (all of them in 480p mode) and the picture was positively astounding...that, and latency wasn't a problem (oh, I almost forgot...CRTs have no native resolution either; so they can display any picture you throw at them, provided they have the proper display technology).
if you have multiple PCs being used at the same time, and you absolutely cannot be the only one using the Wii, then I recommend you set up Quality of Service on your router (if you have a LinksysWRT54G, then I recommend installing Tomato on it, as Linksys' default QoS program sucks); once you find the port number that SSBB uses, you will be able to give that port top priority; that way, when data goes out, the router will put the SSBB packets first (you do not, however, have control over which packets come in...that's FC-FS). Hawking and Linksys both make stand-alone traffic shapers/QoS boxes....I can't vouch for how well they work, but from what I've read, the Hawking one does a little better.....I can't promise you how well it will work with the Wii though, as it's tailored to computers and PC gaming (though the ports the Wii uses may be the same).
other tips:
-make sure your PC's are spotless; spyware and the likes can upload data consistently while you're using the net, which means increased latency and lower bandwidth for you.
-make sure your Wii has a proper MTU, as an improper one will result in lower bandwidth (and slightly higher latency). To test the proper MTU, go to your PC, open command prompt, and type in "ping -f -l XXXX www.google.com" replace the X's with a number between 0 and 1472. keep on increasing/decreasing the numbers until the ping either times out every time, or it says the packet need to be fragments.....I'll give an example:
say you ping google with an MTU of 1472....it goes through...however, at 1473, it doesn't, or it says it need to be fragmented. You have no found your number (1472).
Once you've found the proper number, at 28 to it....most everyone who uses cable, DSL, or fiber-to-the-home will have an MTU of 1500 (this is after you added the 28)....I don't know what satellite will be like, and making adjustments for dial-up is unnecessary (by the by, it'll be interesting to see if dial-up can handle Brawl).
I know with EVDO (what I have), the MTU is often some strange number....for some people it's the default 1500...others (such as myself), have an MTU of 1024. AHh well, I don't really care, as long as I get the best speed and latency out of my service.