iOS 5 is slated to be released as a free update on October 12th for current iOS users. This is a bit different than in the past where iPod Touch users typically had to pay a fee of $9.95 for major iOS updates.
This probably means the rumored October 14th release date for the next hardware version of iPhone is right on track. Software typically is released officially just a few days beforehand so the new hardware can come with new software straight out of the box.
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