It's possible to create a responsive site that views well on a desktop, iPad, and smartphones. By using @media queries, you target screen sizes and adjust the content to fit. For instance, in one case I set it so the site shows two columns in the desktop and iPad, but the right column goes under the left column on a smartphone like the iPhone.
Using a Wordpress plugin is good if you are using a Wordpress site. Some free conversion sites, though, will limit what kind of pages, number of pages, or kind of content you can have in the conversion.
There's no need to create a mobile-only site unless your visitors are 100% mobile.
You can check out my links for a fluid site in the Mobile Makeover Guidelines section of this page: