Precisely my concern. I feel that 4" is the goldilock size for high-end smartphones. I held the Samsung Galaxy S II the other day and I got the slightest hint of feeling that it was too big.

I don't know this for a fact so don't get upset with me for providing unconfirmed rumors... but apparently the phone will not have physical buttons on the front (one of the Ice Cream Sandwich abilities) so the entire front will be a screen. This would allow the device to be about the same physical size as the current Nexus S while having a screen as large as 4.6 inches.