how to fix ''error 003 unauthorized device has been detected''?

Sounds like you accidentally bought a hacked Wii. When you upgrade the firmware found the hack and now your Wii may be bricked. Try this: while holding down the reset button, turn on the power to the Wii. If a menu comes up then your wii is definitely hacked but it has a brick safety program to get you out of it. If nothing happens then you may be out of luck. Since you bought it from someone and it still allows you to play it then there is a good chance that your Wii is modded. I would say return it to the person or store you got it from but that seems to be out of the question.