I am building a mobi site on localhost with Joomla 2.5.1 and am trying to view it in IBBDemo2 as I have always done, but it just displays a blank page when browsing to my local site.
Then I tried another mobi site, also done in Joomla 2.5.1, also blank.
When I browsed to an old project that was built on Joomla 1.5.25, it worked.

Is this a Joomla 2.5.1 issue, or might it be Mobile Joomla ? Anyone else had an issue like this before?
Any sort of advice would be appreciated.

Not familiar with IBBDemo2, but is there any cache you could clean?

Check error_log. If it's issue of Joomla or MJ, most likely you see error message in that file.