I have the feeling that DS Sys—a Nintendo DS emulator—is not going to last long at the iTunes App Store. Not because it can play DS games—it can't—but because it looks and acts exactly like a Nintendo DS.
As you can see in the video, the application emulates a Nintendo DS system screen. In fact, it features a real Nintendo DS in three dimensions. You can change the case color, you can change the "game card"—although there's no option to load Nintendo DS ROMs, so I guess it's just a simulation—and it plays a couple of games. They claim that future versions will support "more game cards" and the microphone.
It seems just like a cool gimmicky app, but I'm as surprised as you are. You can get it for $4.99 while it lasts. [iTunes—Thanks MarkGurman.com]