We are going to set up a solution where the iPhone is requesting data from the server. We have the option to decide what kind of solution to put in place and we are not sure
You are not saying how complex your data structures are and if you actually need state handling.
If you want to keep your network traffic to a minimum, while still keeping some of the structured features of XML, you might have a look at JSON. It is a very light weight data encapsulation framework. There are some implementations available for iPhone, for instance TouchJSON
Claus