[C&Ping from my post in the iPhone area]
Interesting, and I think someone suggested something to this effect last year during the last the next iPhone will be 4 inches debate.
re: the aspect ratio
So many apps are lists, or scrolling pages of data (contacts, Twitter, Facebook, text editors, readers, music playlists...). These all (like the Verge mockups show) would be easy to redesign. Simply keep all the fixed UI elements the same, and lengthen the visible scroll area. Heck, I could see this as a simple bit of dynamic code to account for the available area.
Fixed layouts of course would be a little trickier, and I imagine some apps would want to be written to capitalize on the extra space (like make tabs an option in Safari).
Another thing to note: 1152x640 = 1.8 ratio, and widescreen TV sets are +also+ ~1.8 (1920x1080 = ~1.77)
That would mean the device would use most of the display for widescreen video.