No, with the CHDK, you cannot use a lower ISO instead of an ND filter.
To quote from the CHDK 1.3.0 user manual:
... ISO override gives full control of ISO settings, but does not usually extend the range of available values.
If, however, you are using a camera that has extended ISO settings (i.e., settings that are not accomplished through hardware, but through image processing), you might be able to use the lower settings instead of an ND filter, and the noise will be less, but you will lose dynamic range. And you probably won't be able to go down far enough to do a 10-second exposure in the daytime, as the most common setting will simply give you an additional stop.
I have a 5DMkII with extended ISO settings. The native iso range is 100-6400. I have one "Low" extension (iso 50) and two "High" extensions (iso 12800 and 25600).
The high ISO settings are done by underexposing at iso 6400, and then the image is processed to "push" the exposure higher (like adjusting exposure in post). This will probably add more noise than actually having those settings on the sensor, and in the case of the 5DMkII can cause banding.
The low ISO setting is done by overexposing at iso 100, and then the image is processed to "pull" the exposure lower. Something you can also do yourself in post. This can reduce the noise in the dark areas, but will reduce the overall dynamic range of the image and possibly lose detail in the highlights.
On some Canon dSLRs, partial stops are also done by digital push/pull, which is why you sometimes hear the advice to use ISO multiples of 160 if you want to reduce noise (i.e., the -1/3EVs are pulled, the +1/3EVs are pushed), but this is dependent on your camera model. IIRC, Nikon dSLRs actually use gain across the sensor so there's no "stairstep".
There's no such thing as a free lunch. You have to pick your tradeoffs. The iso 50 setting on my 5DMkII is something I'd only use if that extra stop on the shutter speed makes losing the dynamic range worth it. Typically, it doesn't.