Great review. I'm disappointed that the screen size change is noticably awkward -- I was hoping it would be something that you'd get used to in a matter of minutes. I currently have a Galaxy Nexus and hitting the top left is impossible without two hands or hand contortion that leaves the device in serious risk of being dropped.
Also, why on earth would Apple choose to have apps letterboxed in portrait mode? Wouldn't it make WAY more sense to align them on the bottom of the display, so that the keyboard would at least be in the same place across all applications? Here's hoping developers don't lag on updating their apps.
I'm surprised by the screen size change, too; it has the drawback of reduced thumbability, but without seriously increasing readability.
Because my Japanese iPhone 4S can't do tethering, and iOS maps/navigation is horrible, I just deal with carrying a Galaxy Nexus as well.
The tradeoff is really simple; the iPhone lets you access the whole screen with your thumb, while the Nexus lets you see more usable info with your eyes.
I found that I tended to pull out the Galaxy to read things (articles, this website, etc), even though the screen isn't as high-quality. Just because it is bigger.
With the iPhone 5, it seems Apple traded away the thumb-awesome but just adding 176 pixels to the top doesn't get you much more reading-awesome.
I'd vote for slide to the middle. Bottome-aligned in portrait, centered in landscape sounds good to me. I know that sounds "ugly" but it's probably pretty practical.
Even with the letterboxing centered, it would still make more sense to always have the keyboard on the bottom -- then even old apps would benefit from a little more space when the keyboard is up.
Also, why on earth would Apple choose to have apps letterboxed in portrait mode? Wouldn't it make WAY more sense to align them on the bottom of the display, so that the keyboard would at least be in the same place across all applications? Here's hoping developers don't lag on updating their apps.