This is what's going to happen
Apple will release the following.
iPhone 4S (8GB only, A5, camera bump, non-glass back, other cheaper materials): $99 on contract. Will be single design 3G+ multi-carrier handset using new CDMA/GSM Qualcomm chipset allowing single device for all carriers.
iPhone 5 (16, 32 and 64GB, A5, 8MP cam, larger screen, tapered design with similar shape back as has been reported, larger home button supporting gestures.) Battery life will be somewhat similar but possibly improved due to use of A5 processor. Will be single design 3G+ multi-carrier handset using new CDMA/GSM Qualcomm chipset allowing single device for all carriers.
If, and it's a big if; If Apple releases only 4S update, you can most likely then assume that the i5 design is not delayed but intended to house 4G/LTE technology they intend to announce 2nd Q-2012.