Okay. I had to edit my last thread which contained the walkthrough to install illegal software. I now have created a new walkthrough which contains instructions for using the Twilight hack to install the Homebrew channel and instructions on how to downgrade your Wii's firmware. I have read that the Homebrew channel does not work well with Wii versions 3.3U and 3.4U.
I know there was a topic on this a long time ago but I have an update. When you buy a new Wii, it either has firmware 3.3U or 3.4U. Nintendo released this firmware to circumvent the Twilight hack that many users are using to install .wad's which contain homebrew programs. So how can you get these .wad's and .dol's to work? Through various google searches and the help of a few Youtube videos, I found the answer. No modchip is required and this is purely a software hack.
Notice: If you have a Wii that DOES NOT have firmware version 3.3U or 3.4U, you do not need to complete the hack. You can install the Homebrew channel to give you the ability to use homebrew apps but you do not need to downgrade your firmware.
CAUTION: Following these steps can result in semi-bricking or totally bricking your console. As explained in these articles, no warranty is implied or expressed. Follow these hacks at your own risk.
Now for the step by step instructions.
1. Ensure your SD card is formatted as FAT. By default SD cards are formatted as FAT, so if you're not sure you can skip this step.
2. (Optional) If you have an existing Zelda save that you want to backup, do so before proceeding:
A. Put your SD card in your Wii and turn it on.
B. Go into Wii Options --> Data Management --> Save Data --> Wii
C. Find your Zelda save, click on it, click "Copy", and click Yes
D. Put your SD card in your computer, and copy the "private" folder from the card to a safe place.
3. Copy the "private" directory from the Twilight Hack download to the root of your SD card.
4. Take your homebrew Wii executable (elf or dol file) and save it in the root directory of your SD card as "boot.elf" or "boot.dol" as appropriate.
5. Put your SD card in your Wii and turn it on.
6. Go into Wii Options --> Data Management --> Save Data --> Wii.
7. Find your Zelda save, click on it, click "Erase", and click Yes.
8. Open the SD card and select the "Twilight Hack" save that corresponds to your game region. Note: Some people are having problems with the Wii not "seeing" the save file on the SD card. If you are experiencing this, try setting the archive bit for the data.bin file - in Windows this can be either be done from the file's properties dialog (right click on it in Windows Explorer and check the box) or from the command line using "attrib +a <path to data.bin>". More info at #wiihelp on Efnet.
9. Click copy and then yes. Now exit out of the menu.
10. If you are using System Menu 3.4, you must immediately put the Twilight Hack to use. Turning off or running some other channel or game will have the System Menu delete the savegame again, and you'll have to start over.
11. Insert The Legend of Zelda: Twilight Princess game disc and run the game.
* If you have the USA version of the game, load the "TwilightHack0" or "TwilightHack2" version of the game as appropriate (see above).
* Otherwise, load the only "Twilight Hack" save game.
12. Once in the game, either walk backwards or talk to the man standing in front of you.
13. Follow the instructions listed on the screen.
Other information can be found here: http://wiibrew.org/wiki/Twilight_Hack
Now upon reboot, you should see a new channel called the Homebrew Channel. This channel will be used as a gateway for our next hack. You can also download various homebrew apps that will allow you to play .avi's and other media from your SD card on your Wii.
Now, if you would like to downgrade your firmware, this is the way that it is done. This is where is gets tricky and most risky. Downgrading firmware incorrectly can cause your wii to become a paperweight or cause your Wii to be semi bricked. Again I urge you to follow the next steps carefully and at your own risk. From experience, and from hearsay, Nintendo disabled the install of .wad's with firmware 3.4U.
Upon various Google searches I came across the 3 part walkthrough on Youtube on how to downgrade the Wii's firmware. These videos are very thorough and I followed them to a "T" and it worked flawlessly. Warning.....when I downgraded, I went back to the 2.2U firmware. When I put in a newer game (Smash Bros Brawl) I had to upgrade to 3.1U. This upgrade didnt disable my ability to install wad's or dol's or play any of my games.
Link to the first Youtube video: http://www.youtube.com/watch?v=tUiHK4-LNlA
Follow the Youtube tutorial very closely. Make sure to read the "more info" in the first video.
Make sure you follow onto the 2nd and 3rd parts of the walkthrough. If everything goes smoothly, you will be downgraded to firmware 2.2U and be good to go. Enjoy!