Having been able to spend some time with the new, about-to-be-released iPhone 5, I can tell you that it's better.
Better by quite a bit if you compare it to the iPhone 4; better by a little bit when compared to the iPhone 4S. Noticeably better all around, though, so if you can work it out with your carrier, and you're an Apple fan, this is the one you want.
The tech press is correct when it points out that many of these features are already elsewhere: Maps on Android phones, bigger screens on Samsung phones, better cameras on Nokia phones. Apple, though, is the best at integrating the entire package, and making it a smooth experience for iPhone users - especially those who find themselves inside the Apple ecosystem (iTunes, iCloud, MacBook, etc).
U.S. & World
If you're one of those people, the % is a step up. If feels different in a good way - i.e., different from anything else on the market. The phone is faster, thanks to Apple's A6 chip, and that's nice given that we all use our smartphones as mobile computers. You want results, maps, photos, Facebook updates, whatever, and you want it faster than before. Now, you've got it.
The 1/2 inch screen size upgrade is a little noticeable now, largely because the phone itself is a bit longer. Where you'll really start to notice it is when app makers put that real estate to use. Apple has wisely let the app makers do that on their own time. They will, though, and you'll start to notice a little extra functionality in your reservations, games, etc.
The camera is basically what you already have in your iPhone 4S, but with some subtle upgrades smartphone photographers will notice. Everyone, though, will get a kick out of the Panorama feature - as soon as you download iOS 6, give that a whirl. It's cool.
Yes, I know - if you're not an Apple fan, you can find a lot of this stuff elsewhere. The reason for Apple's success (not to mention its record high stock price) is that Apple fans - and the number is growing by the day - can find all these features in one place. It's a good looking place, and it's a place that, on first experience at least, works well.
Scott can be found on Twitter: @scottbudman