I does work on MobileSafari but not on UIWebviews. There's a key called "WebKitOfflineWebApplicationCacheEnabled" that's automatically set to YES but it doesn't seem make any difference. I'm trying to find out why, but for that I need to go down to the dungeons of Apple's private frameworks and there is where I'm struggling at the moment.
http://developer.apple.com/library/safari/#codinghowtos/Desk...
There's nothing you have to do to enable it. Except use it.