Even prior to the DS' release there has been a conventional wisdeom that Nintendo implemented a super-special networking protocol with super secret magic sauce. I have partaken in such conventional conclusions myself.
However, in the past week and a half there has been a lot of work done concerning how the DS peforms networking and Darkain has updated his DS Wi-Fi hacking page to give more detail on where he thinks the Wi-Ni protocol stands, and that may be not very super-special at all:
I believe that "NiFi" is mearly an alternative to TCP/IP for the DS. see, the TCP/IP protocol is actually a bit complex in terms of what all it can support, hence why it is used for general internet communcations. to create a more basic sollution, it appears as tho nintendo came up with their own alternative to TCP/IP. now, this doesnt mean that they wont use TCP/IP in future games (they already said there will eventually be internet based games, wich TCP/IP is a requirement for), but this is on a per-game basis, and nothing out there right now uses such a protocol yet.
The reason why we are able to capture packets from the DS right now is because we are doing this at Layer 2 (like a MAC dump), not Layer 3 (like a TCP dump). this bypasses any sort of protocol translations, and gives us raw binary data to work with.
As always, visit his page for the full details.