I wrote a piece this past summer noting how dull the iPhone's display was starting to look compared to the big, bright AMOLED panels on rival devices.
Apple's new display is, yet again, a class leader. Clarity has never been a problem for Apple, and the difference is instantly visible when a Retina display is placed next to any rival panel.
In terms of size, however, the difference really isn't that great. User interface elements are still exactly the same size and the new aspect ratio is actually kind of awkward. It's nice to fit more lines of text on the screen, but the improvement is minimal.
In a way, it seems like the iPhone 5 has a bigger display just so that Apple can say the iPhone 5 has a bigger display. It doesn't add much to the overall experience.