I must have missed the announcement because I only discovered this option recently when I was looking for something else on my blog's settings pages. I set it up as soon as I saw the option was available. A screenshot from a friend's iPhone is at right. Now if you access my blog from an iPhone, Android, or other mobile device, Blogger should detect it and render the mobile template automatically.
If you want this for your own blog, you need to enable the option yourself and pick a template. In Blogger in Draft (the default dashboard I have been using), the mobile option is under Dashboard > Template. In standard Blogger, the option is under Dashboard > Settings > Email & Mobile. If you want to read more about it, see the announcement.