Well this is interesting. iOS 6, pictured above on the left, is now able to scale to show five full lines of apps when displayed at 640x1136—the resolution a reported 4-inch iPhone would have.
iOS 5.1, which is on the right, only shows four lines when run in the same iOS simulator app. That's telling, since there would be little reason to add the support for additional lines if the screen was not going to get bigger. [9to5mac]