I've tried both the WP Mobile Edition and WP iTouch plugins, which create a cellphone-friendly interface for a WP blog. I wasn't happy with either of them, but I'm leaving the WP Mobile one in place. It makes sense for Blackberry users and those with phones that have small screens or anemic browsers.
For the iPhone, though, I decided to disable the plugin. It did create a nice, clean interface, but it doesn't show the pretty front page I've been working so hard on. And with the iPhone browser, you can view the page horizontally, scroll up and down and side to side, use gestures to zoom in and out, and generally experience a webpage much more like you're viewing it on a regular monitor.
Have you tried to optimize your site for cell phones? What did you use?