As every web service is looking to customize itself for iPhone & G1,Google has also announced customized ads for iPhone & G1 and for any other smartphone supporting a Full HTML browser.

Google Ads,that we see on desktop PC/laptops are of different size compared to Ads for Mobile platforms such as iPhone and that’s why there is now a separate option in your AdWords account settings to enable Ads for mobile platform or desktop or both.

As more and more users are browsing web through mobiles,this step by Google seems to be a strong indication of the future of Mobile Web.

Official announcement is here