It's not even the fourth generation! So: iPhone, iPhone 3G (second generation) + 3GS, iPhone 4 (third generation). I really don't like when people say 4G because it's twice wrong but it's hard to blame those who do it.
Except most people think: iPhone, iPhone 3G, iPhone 3GS, and iPhone 4. There's an argument to be made that the iPhone 4 is the 4th generation of iPhones.