Sources within the AT&T Mobility division have apparently confirmed that they have been testing the Apple iPhone 5 handset since the 6th of July, as the countdown to the launch of the iPhone 4 follow up continues.
Chiphazard's claims haven't been independently verified and therefore need to be taken with a big pinch of salt. Mobile phone operators are normally given handsets several weeks before their official release dates to iron out any potential issues and to tweak/customise the devices for their customers. The handsets that have apparently been handed to the testing teams are pre-release versions rather than the end product.
The iPhone 5 is expected to be either a radically different version or a just-good-enough improvement depending on whom you talk to. According to some reports, it is expected to come with a dual core system on chip (the A5, which is based on the Cortex A9), 1GB RAM, iOS 5, a bigger screen (with a higher resolution to maintain Retina Display) and a thinner design that makes full use of the new battery technology introduced in the iPad 2.
Others claim that the next iPhone 5 will stick to the same form factor as the current iPhone 4 and will feature minor internal modifications to keep up with the competition.