This is Magento 1.8 known bug.
look for the code in your frontend/default/theme/layout/checkout.xml
<code><span class="tag"><checkout_onepage_progress></span><span class="com"><!-- Mage_Checkout --></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"right"</span><span class="tag">/></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"left"</span><span class="tag">/></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"root"</span> <span class="atn">output</span><span class="pun">=</span><span class="atv">"toHtml"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress.phtml"</span><span class="tag">></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_payment_info"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"payment_info"</span><span class="tag">></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"></block></span><span class="tag"></block></span><span class="tag"></checkout_onepage_progress></span></code>
Change it to this
<code><span class="tag"><checkout_onepage_progress></span><span class="com"><!-- Mage_Checkout --></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"right"</span><span class="tag">/></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"left"</span><span class="tag">/></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"root"</span> <span class="atn">output</span><span class="pun">=</span><span class="atv">"toHtml"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress.phtml"</span><span class="tag">></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"billing.progress"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/billing.phtml"</span><span class="tag">></block></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"shipping.progress"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/shipping.phtml"</span><span class="tag">></block></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"shippingmethod.progress"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/shipping_method.phtml"</span><span class="tag">></block></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"payment.progress"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/payment.phtml"</span><span class="tag">></block></span><span class="tag"></block></span><span class="tag"></checkout_onepage_progress></span><span class="com"><!-- Individual blocks for Progress steps begins --></span><span class="tag"><checkout_onepage_progress_billing></span><span class="com"><!-- Mage_Checkout --></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"right"</span><span class="tag">/></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"left"</span><span class="tag">/></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"root"</span> <span class="atn">output</span><span class="pun">=</span><span class="atv">"toHtml"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/billing.phtml"</span><span class="tag">></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"></block></span><span class="tag"></checkout_onepage_progress_billing></span><span class="tag"><checkout_onepage_progress_shipping></span><span class="com"><!-- Mage_Checkout --></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"right"</span><span class="tag">/></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"left"</span><span class="tag">/></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"root"</span> <span class="atn">output</span><span class="pun">=</span><span class="atv">"toHtml"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/shipping.phtml"</span><span class="tag">></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"></block></span><span class="tag"></checkout_onepage_progress_shipping></span><span class="tag"><checkout_onepage_progress_shipping_method></span><span class="com"><!-- Mage_Checkout --></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"right"</span><span class="tag">/></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"left"</span><span class="tag">/></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"root"</span> <span class="atn">output</span><span class="pun">=</span><span class="atv">"toHtml"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/shipping_method.phtml"</span><span class="tag">></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"></block></span><span class="tag"></checkout_onepage_progress_shipping_method></span><span class="tag"><checkout_onepage_progress_payment></span><span class="com"><!-- Mage_Checkout --></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"right"</span><span class="tag">/></span><span class="tag"><remove</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"left"</span><span class="tag">/></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_progress"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"root"</span> <span class="atn">output</span><span class="pun">=</span><span class="atv">"toHtml"</span> <span class="atn">template</span><span class="pun">=</span><span class="atv">"checkout/onepage/progress/payment.phtml"</span><span class="tag">></span><span class="tag"><block</span> <span class="atn">type</span><span class="pun">=</span><span class="atv">"checkout/onepage_payment_info"</span> <span class="atn">name</span><span class="pun">=</span><span class="atv">"payment_info"</span><span class="tag">></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"></block></span><span class="tag"><action</span> <span class="atn">method</span><span class="pun">=</span><span class="atv">"setInfoTemplate"</span><span class="tag">><method></method><template></template></action></span><span class="tag"></block></span><span class="tag"></checkout_onepage_progress_payment></span></code>
This should help.
Full article about problem: http://stackoverflow.com/questions/19218560/magento-mobile-shoppe-theme-onepage-checkout-not-working-on-ce-1-8
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