My wife and I both had the 3gs. I upgraded her phone just because she's with the kids more and we don't want to miss the random shots.
The speed, performance in low light, resolution and 720p video make it worth the upgrade. I only use my 3gs camera for utility type pictures - bulk food bin numbers, where I parked, whiteboard diagrams at work etc.
If you already have access to a dslr I would argue the 4s would be a better choice than a compact point and shoot.
For the buy vs wait for iphone5 debate, check out macrumors.com. It says neutral right now and estimates it is at about halfway through its average lifecycle.
Iphone 4s has an hdr mode which is worth googling about. It seems to take better pictures that don't have any movement in the scene.