you can change the UV channel in the UV coordinate node, though I don't know if that works in mobile.
the main down side to multiple UV channels is that it is stored as addition geometry information. If you have a dense mesh that you exspect will be rendered often(such as mountains, terrain or buildings) it will chew through your geometry budget.
though one extra UV shouldn't be a big problem, any more you might start seeing problems.
here is the UDN document for texture blending but i think that's more for detailing
mobile does support some vertex painting in the newer versions, which could work but will give you that fuzzy transition between textures, and can get expensive as well.
I recommend taking a look at the citadel mobile map that comes with UDK. they use multiple materials, tiling textures and carefull overlapping of UVs to create terrain. the end result looks great but requires a lot of pre-planning in the modeling and UV phase.