I'm surprised there are so many votes for the 4" screen. I think one of the great things about the iPhone is its more compact sizewhenever I see my friend's large Droid, I dread the thought of having to lug it around all the time.
Besides that, I'm not convinced they will be able (/ want) to do this technically. This has been brought up earlier, but what would the new resolution be for a 4" device? They had done so much marketing for the retina screen and its 326ppi(?)would

want to ruin that now?
The only possibility would be if the iPad steps up to 2048x1536 and the iPhone to 4"/1024x768 (still ~320ppi), but what would this difference do to the apps that have been created with specific dimensions in mind? Any developers have a thought?