1. Apple is not RIM. They made huge advances in iOS 5 this year, and iOS 4 was already the most stable and intuitive OS out there (and, with the iPod touch and iPad, the most successful mobile OS). They are not getting complacent. Apple could re-release the iPhone 4 exactly as-is, and make it available in just 2 new colours. You can bet your life's savings that there would be line ups as far as the eye can see.
2. Nowhere. You will find it very easy to be first in line wherever you choose for the next Android hero. People don't have the time or the money to line up again and again every 3 months.
3. Apple actually takes time to develop their products. Each new device is a real commitment for Apple. And, in what world is 16 months 2 years? It's 1.3 years... Talk about rounding up!
Personally if there isn't a redesigned iPhone, my thought is that there was, but they couldn't reach the demand or there was manufacturing issues. There is always the possibility though that Apple is being so secretive that even the people leaking these rumours truly believe there is only a 4S, meanwhile Apple's higher-ups are plotting for the iPhone 5 release.