Despite early rumors to the contrary, TUAW is reading reports from around the Internet that the new iPhone 4S will use 512MB of RAM memory, not the full 1GB many had hoped for. In terms of specs, this falls right in line with the iPad 2's 512MB of LPDDR2 RAM, per that device's iFixit tear-down.
Reports of the 512MB RAM first surfaced from the developers of Infinity Blade on a Eurogamer.net interview