If this will really have a 1Ghz process and a 8MP camera, maybe it will force apple to really beef up the next iPhone. I mean 3Mp for a camera is still weak.
One thing that the iPhone has over all other imitators is the OS. By far superior to anything out there as of right now. So 1GHz processor or not, I think the 3GS will still beat it in terms of UI and user experience