iPhone 4 still has a higher resolution screen.
yeah, but it can't be higher without having a much higher horizontal resolution. the iphone 4 is 3:2, not 16:9. assuming the specs are true, that resolution is probably the sweet spot that they could have aimed for. but again, 5 inch screen is pretty large. iphone 4 has a considerably smaller screen, though, higher pixel density.
oh, and there was XMB talk earlier. If this thing does have touch and other inputs, it would be shocking stupid not to have a new interface, even for Sony. The XMB is designed for direction inputs like those on a TV remote or game controller.
I thought it was hilarious how they didn't bother changing anything or providing another option for the move.