The good news is that the HTC Desire S has similar specs to my Droid X, which is my target device. Zelda should have some problems in the cutscenes, Kokiri forest with all the sprytes and bugs flying around, and in the open field, but should run pretty smooth in most of the dungeons, towns, etc. There are some tweaks you can try in
this thread for improving performance a bit (play around to pick out the settings that you can live with without destroying the gaming experience). Also, in the areas with a lot of audio skipping, even just turning the volume down can help make the game more enjoyable.
The next update will have some speed options you can play with to improve the audio. An update in the near future will remove the SDL layer which should also improve performance. I'm also working on an adaptive audio plug-in that should eliminate mild cases of audio skipping. And I'm also working on adding the ability to link with N64oid video plug-ins, which seem to be a bit faster than the 2 current ones. In the next couple months I expect Zelda will run smoothly in virtually every part of the game, with maybe some lag in just the cutsceens and scene-changes where a lot of textures have to load on the fly.