I use the speaker phone daily on my iphones and the iPhone 5 performs noticeably better. In some situations I actually turn down the speaker volume, which I never did with my 4S.
As Gav2k has correctly said, to be precise the iPhone has 2 speakers (every iPhone made has had 2 speakers), one is the earpiece and the other is at the bottom for music playback, ringtone, and loudspeaker.
The 5 is both louder and clearer than the 4 or 4s.
The speaker is definitely louder and sounds much better too. What I mean is that it sounds more clear and louder. The bass and such isn't much better but there is a noticeable difference.
With the caveat that I'm an audio-idiot savant, every iP5 phone I've listened to distorts like crazy at anything above 2/3rds volume and much more so at full volume than the iP4s. That being said, the iP5 plays much louder at full volume than the iP4s, which they seem to have accomplished at the expense of some sound fidelity.
Yep! This guy has good ears!
The speakers are very good; nice and loud, but there is some 'distortion'. It seems as though the audio compresses at loud volumes giving (what I presume you're hearing), that 'pumping' or 'breathing' effect. Again, only really noticeable by audio fanatics or your friend if you spend 5 minutes showing them the difference
The speaker is noticably louder and sounds noticably better in the mid and high range, but I think I notice a slight reduction in bass (although with much clearer bass).