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Thinking of putting genestealer arms on my chaos lord (who is; in my fluff possesed) to look unique.
Do you guys think it could be done and not look stupid?

I'm using Nid bits on my Oblits and Mutilators. They look absolutely fine

Using nid bits for posessed marines works fine, though I do believe it works best if you cover up some of the more recognizable parts of the arms with a little bit of greenstuff. Genestealers have those small, whatchamacallems on their lower arms, those openings that make you see the ribbed muscles underneath, and those scream tyranid to me. If you rub just a little bit of GS over it to cover it up, you'll have generic powerful looking organic claws. Maybe add some guitar wire for that bio-mechanoid chaos look. ^^
Good luck and have fun modelling, poke us when you have some pictures of the WiP.

My friend has my Nid's Crushing Claw for one arm on his Daemon Prince. Looks pretty badass actually.

Yeah, fine in principle, but I'd modify them a little to look more chaotic and less niddy - you don't want them too look too obviously ex-nid.