I have to admit the I wish the 4S had a bigger screen (my old eyes aren't what they used to be), but if the dictation in Siri is accurate, then at least my big fingers won't cause so many errors typing. All in all, having seen Apple's presentation and getting an idea of where they're going, I'd be happy to upgrade from my 3GS. I have no doubt at least one iPhone will have a larger retina display in the near future (June?), but mostly it seems to me that they have improved a great design that came close to being optimal in the first place.
However, if Siri doesn't work (e.g., due to network lags etc.) or if Apple screws up iCloud (my MobileMe and iTunes accounts are on different names), then they will truly have egg on their face. If they get it right, then they'll be fine. Indeed, if Siri does work, then Google and Microsoft will have a hard time emulating it, for Apple has no doubt cornered the relevant patents and licenses.