It's not known if the DS will be able to do that (answering RABicle's question). It's certainly capable but there are many hurdles to overcome, mainly the fact that people don't want their DS's channeling other people's games and the fact that if a vital player decides to leave a ton of people's connections could get dropped.
Now, on to the pictochat question. Nintendo has officially only said that the DS will alert you when someone comes into range on Standby or Sleep mode. So it's not known yet if the DS will bother you in the middle of a game. Reggie said the DS will "spring to life" when other DS's are near. Anyway, we'll all find out soon enough....i wouldn't take anything you hear too literally since I'm sure half of the things Nintendo says about the simple system features are that clear and thought out.