Question Answer: Yes I was able to play Wii games just fine. This was with WBFS partition though. I was using WBFS and Neogamma 8x something. I had just finished RE4 (for the first time) and I thought since I was already in the GameCube era that I may as well knock out RE0. Then I started thinking instead of jacking with the two discs why don't I just see if I can load it off of this same hdd. When I came onto the forums is when I saw that in order to play GCM's you had to have a Fat32 32kb cluster format. So I formatted that same drive and have yet to be able to load anything from the new Partition.
Update: I downloaded and loaded everything you suggested. I started out by replacing the *.dol(s) in the various programs like WiiFlow and WadManager. Getting the Wad Manager up to 1.7, and WiiFlow up to 4.0.2. I also downloaded the Dios Mios BootLoader. I installed the *.wad from the full zip using Wad Manager 1.7 and I still don't have an app to launch from within my HBC as I thought there would be. Maybe I'm still missing something? You have said that I wouldn't see Dios Mios in my apps. So I went back to the NeoGamma and CFGUSB from within the HBC and they still cannot see the partition. NeoGamma is still looking for a WBFS partition. Seems like CFGUSB is able to at least mount the drive but unable to see any of the images I have loaded on the drive, which is only RE0. I have RE0 in a "games" folder and it is currently labled games2.iso. I was reading some of the other posts about a naming convention that the games have to have... but figured I wasn't that close to worry about the naming convention.
Last but not least I noticed that my Wii is still on 4.1. Do I need to upgrade to 4.3 whatever in order to get these newer mods to work? Just trying to think outside the box. I think there are still some dots or something that I'm not connecting. Any other advice you have is still appreciated. Thanks in advanced.