WordPress.org

Do I really need to use this plugin?

Yes. These days lot of people are using PDA and iPhone. Making your blog mobile friendly is no harm.

Should I modify any code in wordpress?

Not needed. You have to just upload the files

How can I disable iPhone beta template ?

If you want to disable the iPhone beta template please remove the word iPhone from user agent in PDA options page.

If I de-activate this plugin will it affect my blog?

No. This plugin uses some of function of wordpress. WordPress has nothing to with plugin. So de-activating this plugin is 100% safe.