There's a DSchess homebrew that I am going to try out now, you can find it in GBAtemp's homebrew database thread...But it does not seem like its supported anymore (the author hasn't made an update for many months). I think the source is released so someone can continue it...
[EDIT]DS chess is pretty cool. No wifi or anything like that sadly, but the computer isn't easy. It has a few bugs (like, it said I was in check when there was no way I was, and wouldn't let me move anything because of it. I had to start a new game). There's no two-player hotseat play, but the touchscreen works perfectly.
Its a good chess game, it just has no multiplayer (I would think that hotseat would be easy to implement). All it would take is someone to add that stuff in (and they should!).
There's adustable AI difficulty as well, yay.