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The iPhone 5 is due soon, and will presumably ship with IOS5. It's rumored to have a faster cpu than the iPhone 4, so I wouldn't upgrade my iPhone 4 until IOS5 has been out for a month or so, just to make sure Apple gets it running ok on the iPhone 4 without slowing it down too much.
What new features does IOS5 bring?
1) Android-style notification messages (they don't interrupt what you're doing on the iPhone)
2) ties into iCloud service for streaming your music collection to your phone
3) Twitter integration helps Twitter to work with new apps
4) fixes to the Camera, and photo editing is built-in feature
5) wireless updates, so you don't have to sync to your computer
6) finally, a to-do list
So I'm excited about IOS5, but still patient enough to want to see if it works ok on other people's iPhone 4s before I load IOS5 on my own iPhone.