What are you using to test the mobile site? A real iphone or a web simulator? I suggest that if you use a web simulator then turn "Domain (multisite) support" to Yes, and "Redirect to domain" for iPhone to yes as well. Create a sub-domain
iphone.yoursite.com that points to the same directory where your site is hosted. Then in the web simulator enter
iphone.yoursite.com. On a normal iphone it will point to the iphone version even when you enter
yoursite.com but on a web simulator this does not happen.