The most interesting aspect of Nintendo's recently announced DSi is the addition of SD slot. According to reports, this card is intended to store photos, video, music and games from the DSi Shop. So, wow! it sounds like Nintendo is actually allowing users to play games from a re-writeable memory card. This sounds perfect for homebrew.
It also sounds perfect for game piracy, which is why I'm doubtful that Nintendo would make this slot anywhere near as useful as it sounds. Aside from maximizing their market share, Nintendo's greatest desire is to eliminate game piracy for their systems.
Nintendo vs. the Aarrr! 4
Earlier this year Nintendo sued a group of companies in Japan for importing "game copying devices" like the R4DS. Because that's how they view them - simply as "game copying devices" with the implication that all game copying is illegal.
Of course, that's how they have to present their case. If they drew attention to the various uses for these cartridges which are clearly non-infringing like Moonshell, DS Organize, and the numerous homebrew titles, then they would be presenting a weaker (but more truthful) case.
Granted, it's likely (although I have no figures) that a significant number of R4 carts have at least one pirated game on them. And the "game backup" defense that is often used is weak because Nintendo made it impossible for normal users to create their own backups. This is important because the courts view a file you made yourself differently from a file you downloaded from the web. One is a backup and the other is not - even if the 2 files are identical and you own a legitimate copy.
Regardless, the legality of these carts (in the U.S. at least) will likely be determined by the precedent established in the Betamax case. This is where the "significant/substantial non-infringing use" defense comes into play. That is, the legality of these devices will depend on whether or not they support a non-infringing use like homebrew. Since all of these devices effectively enable homebrew, it probably more realistically comes down to whether or not there is a vibrant ("significant") homebrew community using these devices.
What about the DSi?
With the addition of music and video playback in the DSi, they're undermining the need for some homebrew like Moonshell. But there will always be a demand for other homebrew apps and games. If they really want to eliminate the R4, M3 and other carts, then they need to eliminate the need for these devices. That means having some Nintendo sanctioned method for writing your own games. With the addition of the SD card in the DSi, they now have a mechanism for doing this.
But will they do it? Sadly, I think that it's unlikely. My guess is that Nintendo has a love/hate relationship with homebrew. Actually, it's probably more of an "indifferent/hate" relationship. Some people in the company probably think it's cool what people are doing with their hardware, while others can only see dollars (and yen) lost to evil pirates.
And even if they do allow user-created games to run from the SD card, there are so many ways for them to screw it up and render it (mostly) useless. The most obvious mistake would be to not grant these SD card-based games full access to the hardware, but they could also require that apps be signed or some other nonsense. Nintendo just needs to look at how Apple is handling approvals for the iPhone App store for inspiration.
But this is all speculation. We know very little about what Nintendo is planning on doing with the DSi. My hope is that they will enable homebrew on the SD card, but I'm not holding my breath.