Check out : http://www.slashdotdash.net/articles/2007/12/04/iphone-on-rails-creating-an-iphone-optimised-version-of-your-rails-site-using-iui-and-rails-2
It is upto you whether you want stripped down html or WAP.
Cameron Moll has a mobile web ebook that I've heard good things about:
Keep up to date with Rails on Twitter and This Week in Rails
Policies: Conduct, License, Maintenance, Security, Trademarks