C'mon. I can't be the first person to have thought of it. I just played DDR on the PS2 this week (which my neighbors just got) and immidiately needed to pick up some poi and start swinging to the beat. Granted, my footwork sucked and my poi suffered but I actually could see it working (on the easier levels anyway.)
Butterflies worked the best cuz they're the easiest to swing on the beat. I got as far as TTN tricks and weaves.
I think if I could step up my DDR game, I could actually get somewhere.
The utopian blend of poi and video games... who knew?!