Lest say someone develops a wii ware title and it becomes massively popular "were talking over 3 million sales" how much does the developer earn (assuming the members of the team are being treated as one developer). Also the wii ware title is being sold at the maximum allowed (1500 wii points "equivalent to 15$"). Does Nintendo deduct 5$ out of every sell and pay the developer 10 dollars per unit sale or what?

In order to create a licensed WiiWare title you (your company) would need to negotiate a contract with Nintendo.

Part of that contract includes how funds are distributed.

Yes, Nintendo will take a portion of those funds, as negotiated in the contract. Another portion of the funds would go toward sales tax, where applicable (although the end user does not directly see it.) Whatever remains would go to the developer or as specified by their agreements.

I'm assuming every company negotiates their own rates. The portions that go to the developer are covered under NDA and other agreements.