I love my 3GS.
I still use it on a daily basis as one of my primary dev units. It has a lovely PayGo SIM in it, with inexpensive data. It's an absolutely brilliant device and my love for my iPhone 4 does not diminish the 3GS's utility.
I never bothered to purchase an iPhone 3G. Although I used several on contracts, it never passed the barrier of "worth buying." From several years distance, I'm even more sure that I made the right choice. (And yes, I know there are many of you out there who adore your 3G units. I'm not trying to take away from that.)
The iPhone 3G was basically a first generation phone with upgrade 3G/GPS capabilities and a slightly modified case. But the iPhone 3GS? It was a completely different beast under the hood.
The 3G vs the 3GS
The model numbers tell it all. The first generation iPhone was the iPhone 1,1. The 3G was the iPhone 1,2. With the same processor, the same memory, etc, not much had changed -- especially if the 3G service in your area was spotty. With good 3G coverage, the usability took a huge jump forward, but for much of Denver at the time that simply wasn't a factor.
Fast forward to the iPhone 3GS (aka the iPhone 2,1). Belying its visual and tactile similarity to the 3G, it was a completely different animal. With a massively improved chip, better RAM, a usable autofocus camera, improved battery life and stand-out features like Voice Control, it truly distinguished itself. The name might have been similar, the case might have been similar, but the phone was not.
iPhone 4S or iPhone 5
That's why I don't care if the new phone in October will be an iPhone 4S versus an iPhone 5. Yes, I expect the form factor to mirror the iPhone 4 (which, frankly, is a great phone). The early release of cases supports that form likelihood. But I'm thinking that there's a lot Apple can get done with extra chip power and possibly more RAM, along with the same brilliant Retina display.
The camera may get a boost, and I would be delighted if the capacities each got a power-up -- although I'm always thinking capacities will go up and they never really do as much as I think they will. I'm also thinking that we're going to see extra hardware features like battery bumps, additional sensors, and more. It's fruitless to speculate, however, as to what Apple will surprise you with.
As for an iPhone 5, what would make me sad would be if I signed up for a 4S contract and the iPhone 5 debuted fewer than six months later. Of course, Apple could possibly introduce both at once, but I'm wondering why all the buzz, and all the early retail leaks seem to have missed the 5 unit (which we've had hints about in terms of parts and production, but little solid in the way of facts).
The winning iPhone 4S scenario
I'd be particularly happy if iPhone 4S sold with two key elements: multi-carrier support built-in, and sold contract-free. Admittedly, my world view is heavily influenced by the fact that I often need at least one of each unit on-hand for writing and development.
At the same time, I think I could still recommend both the 3GS and the 4 as solid purchase options for anyone jumping onto the iPhone bandwagon. I'd probably recommend against going into a contract with the 3GS. I'd also recommend springing for a newer 4S over a 4 unless there were some brilliant financing at work, but a 4 remains a really great model.
What tantalizes is that we have had enough rumors of a 5 with a redesigned case to be at least somewhat credible. However, the evidence for the 4S is building to inevitable with multiple sources chiming in over the last few weeks.
Jump now or wait?
So the question people coming to me with is this: Should I jump on the 4S or hold out for the 5? My answer is this: If you still haven't bought iPhone or are upgrading for the iPhone 3GS or earlier, grab the 4S. I bet it's going to be spectacular. For iPhone 4 owners, whose contracts are due to run out in February or later (or so my latest query tells me from AT&T), and who don't need the latest/greatest right away -- you probably can afford to wait. If you really want to wait.
Of course, come October everything may change. If Apple announces must-have features that mirror the 3GS-from-3G or 4-from-3GS transition brilliance, just drop everything. Pay the fines, buy the goodies. Because Apple has delivered brilliant in the past. There's no reason to think it won't do so again.