I've seen sources say that as well, i really hope they're right.
Consumer-wise it would make sense for a redesign to get rid of the 'antennagate' issue.
The biggest thing i want from the iPhone 5 hardware-wise is:
-Bigger screen (3.7" to 4" would be ideal) but with the same phone dimensions.
-Faster processor (Dual core A5 sounds great)
-Better battery life
Biggest thing i want from iOS 5 is:
-Superb notification system (rivals WebOS and Android)
-Remastered multitasking (rivals WebOS and Android)
-Changes in the UI (kinda starts getting a tad bit dull)