Yeah, the PSO on DS rumor started up just this past E3 when the hardware was shown. I wouldn't mind it, I think a version of PSO could be done well on the DS. Not a port mind you, but an actual version made for DS, I think they could do some really neat things with it, and make a very impressive looking game in the progress.
It is known that Nintendo and Square-Enix have been working pretty closely on getting some games running online for DS. They will likely be the first, though I recall Bandia saying that they had gotten some PC systems to read the DS on a network and such. So who knows. Either way, developers seem pretty adamant about getting their games online with the DS. I would love the idea of an online game on a handheld, something that can read into a network without having to be tunneled. But at the same time, I don't think I'm willing to pay monthly fees for that kind of thing, as there are to many places where I could take advantage of that around here. Just home and on campus. Not a lot of hotspots in such rural areas. But who knows, Nintendo has always said their plan was to have online gaming be free, should they find an affordable way to do it.