I had this same problem. My iPhone would connect, but when it finally got an IP address, it was just the internal network (169.254.whatever). It appears that the iPhone doesn't like the "WEP 128-bit Passphrase option". Try disconnecting from the ad-hoc network you made, create a new one, but this time choose "WEP 40/128-bit Key (HEX or ASCII)" for your password security. Then, enter a 5 or 13 digit password (if you try doing one less than five or between five and thirteen characters long, the "Save" button is grayed out). If you kept the same name for your SSID of your new network, then go into your iPhone, tell it to "Forget This Network", then connect again with the new password.
EDIT: Forgot one thing - You might need to go in, once you're connected, and change the DNS server on your iPhone. Just click on the network you're connected to, and then under "DHCP", select the DNS setting (it'll probably be the same as the "Router" address, which is in the same network domain as your IP Address which is given by Mint!). You can use any DNS, and you can put in as many as you like. If you're not familiar with DNS, you can use 126.96.36.199 or 188.8.131.52 (those are Google's) or 184.108.40.206 or 220.127.116.11 (those are OpenDNS's). Or just do a search for DNS addresses.
If this helped, make sure to mark the title of this thread as [SOLVED].