Google renders their ads on an Apple iPhone almost exactly like they would on a normal web browser, but with a few changes.
(1) It appears that Google will not show as on the right hand side of the search results. I am not sure why, there appears to be plenty of space to show those ads.
(2) The max number of ads they will show at the top appear to be three ads. This might change in the future.
(3) Apple will automatically convert the phone numbers in the ads to click to dial (this is an Apple thing, I believe).
Here is a picture of a search for ipod via Google on the iPhone versus a normal Safari web browser:
Forum discussion at Search Engine Watch Forums.