There isn't a problem using a biz tld as a nameserver.
The only issue you might see is that domains other than biz would not have glue records at the parent servers, however this is the same if you use a .com tld as a nameserver and point a biz domain to it and it's really nothing to worry about.
It really depends. your name servers arent going to be large and house tons and tons of domains right? If so dont worry about it.
Wullie is right, no glue means an extra lookup and that means more overhead. I think its someplace like 2 extra udp packets per lookup. However slight it may be, the more domains you host the more this overhead becomes an issue. At least the way I understand it.