Sources claim that iPhone 5 September release has been confirmed due to the fact that it has now reached final testing stages. The next generation iPhone, now in the alleged "AP" stage, is being tested by Apple and carrier higher ups.
So basically, it means that the iPhone 5 is being passed around to high level Apple and carrier executives so that they can find, if any, problems that should be sorted out before mass production. Given the September iPhone 5 release speculation, mass production of the iPhone 5 should then be starting very soon.
We know that at WWDC 2011, people were expecting to hear some mention of the next generation iPhone. However, Apple strictly limited the event to iOS 5, iCloud and Mac OS X Lion. Nevertheless, lots of people wish for the iPhone 5 September release rumor to be true, as this has been circulating well before WWDC 2011.
Also, we know that iOS 5 brings the ability to do FaceTime over 3G. The source claims that Apple and Verizon have still not reached an agreement over this and it is possible that the Verizon iPhone 5 won't come with support for FaceTime over 3G. iOS 5 OTA updates may also not be supported by Verizon iPhone 5, as both Apple and Verizon have yet to finalize an agreement for this matter.
Design wise, the next generation iPhone is going to be somewhat similar to the iPhone 4. The only difference in going to be under the hood. Those who were waiting for the rumored 8 and even 12.6 megapixel camera on the iPhone 5 will be disappointed as it is expected that the next generation iPhone will have the 5 megapixel camera, the iPhone 4 has.
We'll update more regarding the next generation iPhone, as soon as the sources bring in more intel. Stay tuned!