I was a little bit disappointed with this... when I first heard about the feature, I figured it could go one of two ways:
A) LRB songs only, custom edited to end in a natural way
B) All LRB and Imported songs, shortened formulaically using a set number of "sections" (using the same section divisions as practice mode) and ending with an abrupt fadeout
Seems like we mostly got the worst of both worlds here, although a small handful of the songs do have nicely-edited endings... still seems like they could have coded it to support DLC shortening as well.
As a Wii owner, I'd have been happy if my game had been coded to include DLC in any form.