The Disc Channel is the channel that one accesses to play both Wii and Nintendo GameCube games. Once one inserts the game into the Wii's front-loading slot, the Wii and Nintendo GameCube discs start to spin. Once the game is loaded the spinning will stop, the respective disc will be inserted into a slot while the other disc fades away, and the title of the game loaded will be displayed.
Once one selects the Disc Channel they will either be able to return to the Wii Menu or play the game that is inserted in the Wii (if one has been inserted). Once loaded, Wii games have images and sound that plays in the Disc Channel, while Nintendo GameCube games will generate a Nintendo GameCube logo and start-up tune.
The Disc Channel is the only channel that cannot be moved without hacking.
There is an unused file for the Disc Channel which is an image which depicts a DVD in a similar way to the Wii and GameCube disc icons. At one point in development, it was likely planned to include a way to play DVDs in your Wii, a feature present in the PS3, which was one of the main competitors of the Wii. It is still possible to play DVDs on the Wii by using various Homebrew applications.
In later distributions of the Wii, the Disc Channel didn't have the GameCube image on it because those Wiis did not play GameCube games.