This posting on the XLink forums from Team XLink admin TheDaddy:
"We will be releasing a USB stick application for DS homebrew developer guys in about 2/3 days...It won't contain source, but will allow coders who use any win32 language to communicate with the DS without having to do anything funky - just UDP sockets."
Also in the post were nods to tunnelling progress. Summary.
1) The USB stick application release does not mean tunnelling support.
2) Tunnelling is progressing nicely.
And finally - XLink seems getting frustrated by the excessive grabbiness and immaturity on the Nintendo DS forum posts. TheDaddy bemoans the DS forum community and praises the PSP forum community for their helpfulness and self-reliance. This is understandable.
3) The biggest barriers once released will be tech support. "We'll be giving you the tunnel application - if it works for you, cool, if it doesn't, go fix it yourself."