The Revolution will be backward-compatible, not just with the Gamecube (the Revolution will use full size DVDs, but you will be able to read the GC mini discs too), but also with the NES, SNES and N64.
The Revolution will have 512MB on-board flash memory storage (and you can use SD memory cards if you need more space) that will probably be used among other things to store these NES, SNES and N64 games that you will probably be able to download from Nintendo's online service.
The controllers, that Nintendo didn't show yet, will be wireless just like on Xbox360 and PS3.
The Revolution will have 2x USB2.0 ports and WiFi out-of-the-box.
GameSpot.com has the full video of the press conference here.
From GamesIndustry.biz:
At the unveiling of the Revolution platform in Los Angeles, Japanese giant Nintendo has given the clearest indication yet that it does not intend to compete directly with Sony and Microsoft's technologically advanced next-gen consoles.
Reports this morning suggested that Revolution will be three to four times more powerful than GameCube, as opposed to the far higher multiples being quoted by its rivals, and the overwhelming feeling from Nintendo's conference was that the new console is designed to be a cheap and highly profitable device rather than a giant and expensive technological land-grab.
Revolution will be the smallest home console Nintendo have ever made, according to company president Satoru Iwata, who presented the system to a packed auditorium in the Hollywood Renaissance hotel this morning.
The unit will be powered by an IBM chip called Broadway and an ATI graphics part called Hollywood, but exact specs of those components have not been announced - with Iwata's only comment on that aspect of the spec being that "when you turn on Revolution and see the graphics, you will say 'wow!'"