I'd rather stick to the real key. The phones can get lost or stolen by accident. The same can happen to the dongle but it's less likely if you keep it in a safe location. You'll carry that smartphone with you everywhere. If you something bad happens while using a phone key you'll be out of luck playing FFXI until you get that key removed. Right now also isn't the best time to be dealing with that because the new expansion.

For the record I wouldn't risk it. A Key only cost $10 and can be locked up beside your machine anyway. This is just my personal opinion but please, think hard before you go this direction.

+1 for the links ReplicaX. Very helpful.