So many things to improve on: bigger screen, live lock screen, better antenna, dual core, better camera, 64GB memory for top model, customization without jailbreaking, something "magical", etc.
<====== iPhone 4 user
Bigger Screen: Maybe, if they can maintain the aspect ratio, and maybe the resolution of the iPhone 4 then I say it might happen. Others have shown that you can squeeze a 4" display into the iPhone 4's body, but according to one thing I read, they were working on the iPhone 4's design for 2 years before it came out, nothing to say that they couldn't also have been working on a larger screen device (in fact they probably have)
Live Lock Screen: Maybe. They like things simple, but they have been known to bow to customer pressure on some things (see firewire on 13" unibody MacBook)
Better antenna: Something to understand is that the iPhone 4's antenna is a better antenna. The reason there was such a broohaha was that while simultaneously improving the reception of the antenna, they did leave that area there where you could short it. So, the problem was that you were all of a sudden getting signal where you never could on any other iPhone (and the way the bars read, you had 2-3 bars) but then you would bridge the antenna and the call would drop. The phone was reporting more signal than it had (fixed), and it was getting a very weak, but usable signal that could be easily dropped. So it was 3 steps forward, 1 step back. As I said, they were working on the design for a couple of years, maybe they have a fix in iPhone 5, but I would be surprised.
Dual Core: Of course it will have dual core. I fully expect it to have the A5 chip that is in the iPad 2, but perhaps clocked lower.
Better camera: The current rumor is that it is getting an 8MP sony sensor
64GB memory: You mean storage, not memory. And more memory (RAM) would also be better. As for the 64,000MB question... I think we have to wait until 64GB NAND is either a: available at all, or b: available in higher quantities. The iPhone only has 1 NAND chip.
Customization without jailbreaking: I doubt it, at least not on the level that most people would want
Something "magical": like?
Etc: Well, I heard a rumor that the iPhone 5 would 'pleasure' you, if you know what I mean, but it wasn't a reputable source.