I'm coming from a Blackberry keyboard device. At first I thought that the 4.5" screen would be too big for my hands, and at first it was. But after having the phone for three weeks now, I'm loving it. The screen size is perfect for viewing and typing on. I feel that the 4.3" screen might have been too "thin" and much harder to type on.
About the space at the bottom, I think they had that so that you could easily hold it with one hand and press the capacitive buttons with your thumb without having to reach too far down. Try to visualize it in your head, if that space was not there and the buttons were much closer to the bottom edge of the phone, your fingers would have to reach a lot more further.