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Is is true that littel things like the panels flashing to show you where to move are gone?
The DS version still has all of the flashes that were in the original game because they are a part of the animation. I don't know if there were other versions of Dragon's Lair that added additional flashes, but I've never seen them.
Your source may be confused because a lot of laserdisc games had some sort of prompt (like flashing panels) for every single move that you had to make. Even Dragon's Lair 2 did that. But the thing is, most laserdisc games are more movie-like, and it's often much more difficult to tell what you're supposed to do unless there's a hint of some sort. Dragon's Lair really behaves much more like a normal video game; it's easier to tell where you need to go, and the main challenge is doing it quickly enough.
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I personally am very happy to see this title come out on the DSI! I am a old school arcade person and this gamebrings back such awesome memories! It plays just like the real thing, music, graphics and all. I recommend this to anyone who was a fan of this arcade game! :)