I remember reading this on Matt's blog, and I also remember saying that it would be feasible back in late 2005/early 2006.
Look. Microsoft has said before that they consider Sony their primary competitor. Since the Wii came out, and is so different, this is even more true.
Sony is trying to get their first handheld foothold.
If Microsoft were to publish Halo on DS, it would be a HUGE blow to Sony, but it really wouldn't hurt Microsoft at all. DS and XBox 360 are totally different markets. One's a handheld, one's a home console. One costs $129, one costs $400. Nobody is going to buy a DS instead of a 360.
People deciding which handheld to buy however are likely to be swayed over by Halo, especially XBox fans.
I remember a Microsoft exec commenting back in 2006 that they thought Sony was being silly trying to take on a market leader with 90% marketshare. Microsoft has *always* supported the DS; they allowed for the release of Age of Empires II DS, did they not?
Halo DS has been a possibility in my mind for a long time. Microsoft wants to hurt Sony, they don't care to put in the R&D for their own handheld, so they'll support Nintendo's handheld and rake in a bunch of cash in software sales in the process (since the DS has the bigger marketshare).
So far Microsoft owned studios have developed both Diddy Kong Racing and Age of Empires II DS. Halo is not that much of a stretch.
You will NEVER see Halo on Wii however, or any Nintendo system directly competing with a Microsoft system.