As far as I can tell, NitroTracker is the top of the DS homebrew world right now, if for no other reason than sheer physical convenience--any decent software really requires the GBAMP add-on for storage, and it sticks out about an inch from the DS, making it an unattractive package for MP3s or relatively shallow gaming. Music is more stationary.
Which is not to say that the experience is flawless, but the problems with it still lie mainly with the nature of the software and not with the program itself. NitroTracker is, well, a tracker. That means that it programs its sample-based music by stepping through a grid of notes like a piano roll, but less flexible. It's like writing a song in Excel (and I would know). For some genres of music--techno and house come to mind--having strict grid patterns of 4/4 eighth notes works well. But if you need to swing at all, or work in different time signatures, it gets ugly fast.
For example, the first slightly elaborate production I tried was the Galactica theme, because I knew that in 9/8 time it would be just slightly larger than a standard NitroTracker measure. It turns out pretty odd--partly because of the samples I used, but also because it's really hard to do decent timing this way (listen for yourself). This morning, on the Metro, I also put together a short version of Dave Brubeck's Take 5, which is even more difficult--not only is it 5/4 time, but it has a definite swing groove going on, which meant that I had to use 15 grid spaces to represent the song in triplets, and even then it sounds odd. To really get good exact timing, you'd need to break each quarter note into at least six grid spaces to get eights (every three spaces) and triplets (every two). That's a clumsy way to build a song. (here's an MP3 sample)
But for all that, I can definitely see this as one of the few applications where it is actually worth the hassle of putting homebrew together. After all, that Take 5 cover uses the DS microphone to sample my voice and whistling, which is pretty cool. A clever and patient programmer could use this to build songs out of ambient noise wherever he or she went. It's quick and fairly cheap, all things considered. As of version .3, it loads samples correctly (the Galactica snippet was built using .wav files I took from Ableton Live) for expandability, and it understands MIDI over WiFi. You could conceivably build a whole row of electronic instruments out of a PC and set of homebrew-capable DS's, especially if you used the other DSMIDIWiFi apps for control and simple synths.