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Total waste of money. They'll announce the iPhone 5 in the summer as they have each year, and your phone will be outdated in a few short months (but you'll be locked into a two year contract).
Unfortunately yes, if you upgrade to the Iphone now you will be missing out on the inevitable refresh in June/July. I believe Verizon justified this by claiming that their customers wanted the Iphone now, rather than later.
*droid*