How to set different settings for a mobile theme?

Just wrap you code up in a conditional:

if ( $GLOBALS['is_iphone'] )
{
    // do funky stuff for mini screens
}

global $is_iphone; will trigger TRUE for all mobile devices incl. tablets.

Edit for WP 3.4+

Now there’s wp_is_mobile() to make checks for User-Agent. It’s basically a wrapper for $is_iphone and does the same.