I'd just like to state the iPhone will NEVER increase in storage. Let's take a look at the main storage models. 8, 16, 32. If it gets 64 gigs, it's going to affect the sales of the 64 gigabyte iPod Touch. The same goes for the iPod Touch. 8, 16*, 32, and 64. If the iPod Touch gets 128 gigabytes of storage, that's REALLY going to affect the sales of iPod Classics.
*A couple of years ago.
So my guess is.
-Instead of underclocking the A4, they'll probably have it function at a higher clock rate, if not at full capacity, along with a newer battery to help keep the functionality.
-5 megapixel rear camera.
MAYBE they MIGHT add a 1 megapixel front facing, but that's stretching it.
512 megabytes of RAM. Let's be realistic. The first two iterations of iPhone had 128, third had 256, and now 512. They only added 512 megabytes because to the iPhone 4 because itstill has to perform it's regular cellular functions, along with the new hardware, and the newer utilites in iOS 4. Remember "iOS 4 was designed with the iPhone 4 in mind." Now, the iPod Touch 3G, 4, and iPhone 3Gs run fine with iOS 4. Nothing spectacular, but they still do what they have to do. Upon speculation of the iPod Touch 4, most people thought it would get a RAM increase, but it didn't, because it doesn't NEED it. It runs "fine" with 256.
-Retina display.
In short, everything the previous iPhone had with a slightly faster speed. Think 3Gs from the 3G.
Now interface wise. These are the things that I want to see, but know won't get added.
-An option to turn off multitasking. I'm in the minority, I see little use with the new multitasking. I shouldn't have to jailbreak it to disable some of the features, that should have been OPTIONS in the first place.
-An option to adjust shadows, and gradients on Wallpaper.