Do I have to rewrite my css3 style sheets to fit smartphone device?
Existing website is standard 2 column layout - do I need to create separate stylesheets for iPhone and iPad devices? then assign those stylesheets with the Media Queries?
Yes. If you want to support different layouts in different devices, that's the procedure.
David Powers wrote a nice tutorial -- Introduction to CSS Media Queries
If you're not too keen on doing this all yourself (it's a LOT of work), you might want to grab a responsive layout from Project Seven.