This.
I'd love to see the iPhone 5 screen go up to AT LEAST 4".
Unless you have average to below average sized hands, I don't see how this phone doesn't feel too "thin" when out of a case.
I'm not complaining because I love the iPhone 4, but I wouldn't object to it being slightly thicker or larger either.
Even though the spec sheet says 3.5" screen, I think it truly measures 3.7", so another .3" couldn't be that hard, and I have to think it would be worth it.
That said, I don't even own an iphone 4 yet (I have the money for it, but I can't buy them yet because of gift card rules) but I do have an ipod touch. I think the 3.5" screen is fine and I can't wait to see the clearer retina display text in person. All that said, if battery life was a big concern, I would make the phone wider/taller before I would go thicker and make the screen a big bigger in the process. Just my $.02.