I'm a web developer and I can say with absolute certainty that it IS possible to build a mobile version of the site.
During the end of December I built a mobile version of the site I work for (4 million+ visits per month site), and we did so without building out a subdomain. You can just insert a mobile-only stylesheet, but its much better to redirect if possible.
As for doing an iPhone version, I would definitely suggest the web-based approach. You can build websites specifically for an iPhone now that are essentially doing anything an app could do, but without the overhead of developing in objective C (Cocoa) and without the overhead of dealing with the app store process (which sucks A LOT).
2007 ZX6R (black)
Fender Eliminator, Hotbodies Windscreen, Pazzo Levers, De-stickered, Relocated Rear Brake Reservoir