I have this slight feeling Zelda DS will be 3d, first person and you use the stylus to control Link's hand. Miyamoto talked about how he wanted Zelda to be more immersive and active, where you don't press a button to pull a lever, no, you pull the lever yourself. Touch something to grab it then move it around, draw your sword and control the slashes with the touchscreen. All that wouldn't work in third person as Link would obscure your view and it would be harder to aim because of the distance. Perhaps it could have a third person view on the other screen but if it's executed well i doubt that's necessary. Also, first person would allow them to make Link more like Gordon Freeman (in an abstract sense, not orange suit and crowbar) as the avatar of the player. Not a character the player is following and controlling like a puppet but himself.
(DS, because of its dual screens, is the only system on the market that the Zodiac cant emulate)
The DS has two screens at 256x192 each, totalling 256x384. The Zodiac has one screen at 480x320. As you see, you could fit both DS screens on the Zodiac (either cutting 16 pixels from both screens or using portrait mode which would probably suck for controlling) and have enough space left to display the emulator's menu, a border, an MP3 player or whatever else you'd want to fit in there. With its huge touchscreen (beats the PSP by a nice margin) the Zodiac would actually be the perfect game machine if it wasn't for its relatively weak processor (200MHz ARM, that sounds like more than it is, the thing can't handle 3d very well and the OS is eating its share). I doubt it could emulate a DS at more than 6 frames per second. So the Zodiac can't emulate the DS, but for other reasons. Damn shame about that processor, if Tapwave threw in something at the power level of the PSP they'd have created the perfect game machine.