i have one of the ev global e-bikes designed by lee iacocca, and it's pulsed dc power. the controller pulses the voltage to limit the current. it makes the bike take off smoother, instead of spinning out. electric motors have instant torque and need an artificial "power curve". the ac motor idea has been tried, but without some sort of controller you have problems, and an ac controller is way more complicated. i would do the front hub motor thing, and hide the battery inside some sort of fake engine, like they did with the occ stingray electric, or the razor set up.