1. I love AudioSurf. Totally worth $10 on Steam.
2. Sounds very possible, but it would require a lot of dedication on the part of whoever makes it, since having to create an engine for the DS that can make levels as complex as AudioSurf does, as reliably as AudioSurf does, and on-the-spot like AudioSurf does, may require more overhead than the DS has to offer, even if it was scaled down to what would suit the DS. (I'm no programmer, but that's a relatively educated answer to your question.) However, what the DS offers in control schemes would suit AudioSurf very well, especially if you were using the Guitar Hero DS grip or did touch screen based movement.
3. Hey, book-style worked for Guitar Hero DS. It could work well for AudioSurf.