Chat room is only for those who are on your friend list only. You cannot communicate with Rivals and random players. And you cannot chat while in battle, only while waiting for the host to start up the match.
For those wondering how I got the idea, I thought I saw Metroid listed on the back of the DS headset box (try looking next time you see one). It's kinda lame that you can only talk to friends (I know Nintendo wants kids to be safe, but it IS a Teen rated game).
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