It's very likely that we won't see a Home button on any future iOS devices; that's pretty impressive, but the new gestures seem to perform the same function really well. It should put Apple way ahead of other mobile platforms who still struggle with which order to place all their buttons.
(I won't say it's completely impossible that Apple would do it, just that it's overall a bad idea.)
However, as a phone I don't see how less than a back button and a home button is sufficient. It's a lot like the mouse debate. I need at least a couple hardware buttons.
And I wouldn't be surprised at all if someone else was floating their design concepts as Apple rumors, so that people would see them, talk about them and consider them through the prism of deference to Apple's design track record.
Daring Fireball has some good discussion on this; he thinks that the rumors of removing the Home Button are false (due to difficulty of discoverability and one handed-use).
http://daringfireball.net/linked/2011/01/12/gestures-home-bu...
For reference: http://www.engadget.com/2011/01/07/exclusive-interview-googl...