There is no need for "crazy rumors." Apple has actually SAID that iOS 5 will be out in the fall (nothing more specific than that). They haven't said anything about a new iPhone, but everyone expects it because they've gotten one (more or less) every year since the original one, and as we all know Apple NEVER changes.
Normally when Apple holds something back off the "expected" release, it's because of a hardware change or last-minute revision. My **guess** on this next iPhone is that it will be a bumped-up version of the iPhone 4 with a better camera and not much else different, relying on iOS 5 to make it seem more different than it actually is.
I **speculate** that summer 2012 is when we are going to get a REALLY different iPhone, one with LTE support and a whole new design. But of course I could be wrong, particularly as I recently got a sweet deal on an iPhone 4 and that's traditionally when Apple releases revolutionary products ... right after I buy the "old" one.
Given that the iPhone 4 is compatible with iOS5 and is likely to be compatible with iOS 6 at least to some extent, I'm not sure there's much point to waiting. Whatever you buy, and whenever you buy it, you're locked out of buying the next one because you're in a two-year (minimum) contract.
So the way I look at it, if I buy an iPhone 4 (as I recently did) I shouldn't even care about the next iPhone (whatever they call it), because I'll be contractless in time for the iPhone 2012 or thereabouts. If I wait and buy the iPhone (let's call it 5), I'm out of the race until at least the iPhone 7, which will make the iPhone 4 look painfully quaint and will probably be so thin and small it can be inserted nasally.
Hope that helps!!