Back in the late 80s and up until around 1995, TV sets in Europe could only show 50hz/625-line pictures (the same way most TV sets in America can still only show 60hz/525-line ones). This meant that all of the games that had been developed in Japan or America for 60hz/525 TV sets played back on European ones with a squashed video display, due to the extra 100 lines of Europe's TV system being an afterthought to the American or Japanese game designers. The slower scan rate of the European system also meant that some games ran, well, slower.
To get around the performance difference between PAL & NTSC, for years now PAL TVs have had the option of running at 60hz. A ton of last-gen games, Nintendo ones included, even gave you specific options for this feature. So it would have been natural to assume that in 2006, the Virtual Console & Wii would have accommodated this.
But PAL gamers are getting shafted by Nintendo - it looks like Nintendo are directly sourcing each region's specific version of a title. So if your 1991 British version of Sonic was letterboxed and slower, then your 2006 British VC version is going to be the same game, even when a superior English-language version exists in the US.
no clue, but for those looking to buy the wii in india (grey market), make sure you get the US version -- games are region locked, online service is region locked, point system is region locked, VC games are region locked etc