Sakurai said that they aren't making a new smash, and I'm 100% sure they aren't. They never ruled out re-releases and ports though. I am pretty sure there will be a portable version of either Melee or Brawl for the 3DS. It would be fun for multiplayer since every kid and their mom will have the console. For those of you who say smash wouldn't work on DS, yeah it won't competitively, but I'd still love to play on 3DS casually.
As for which game: Prior to the release of the 3DS I believed that they would port Melee because it requires less resources and would be easiest to port to 3DS. Now that I know how powerful the device is, I think that if there is smash on the 3DS at all, it will probably be some sort of version of Brawl if console limits are the only deciding factor in porting a game. Loss of source code also affects these decisions.
It may not end up being so though. Rayman 3DS is a port of Rayman 2. They ported from the Dreamcast version even though the PC version was pretty much perfectly suited to port straight to the 3DS. It would also be less work intensive to use the PC version. I think they choose whichever game has the easiest and most closely resembles the dev kit of the console they are trying to port too. So, who knows, we may get a portable Melee on the 3DS after all.