How do I transfer my iPhone 4 configuration to iPhone 5?

Question

I'm planning on upgrading to the iPhone 5 from the iPhone 4. I'd like to transfer my existing configuration, including apps, the folders I have categorized them into, settings, et al, from iPhone 4 to the iPhone 5. I have a couple of questions regarding this process.
1. I use iCloud for backing up my phone. I have a lot of applications, some that run into GBs like the navigation apps, and a few games like FIFA. If I perform a restore from iCloud on the iPhone 5, it could be quite a while before all the apps are downloaded to the phone. Is there a better way to do this? Can I use iTunes? The problem with using iTunes is that I may have to turn off iCloud backup, albeit only for the duration of the transfer. Am I right in this assumption? Will iCloud delete my existing data if I switch from iCloud Backup to iTunes?
2. My wife wants to use my iPhone 4. She currently has an iPhone 3G. She does not have her own iTunes account. I have set her up using my account so she can use all the applications that I download. Basically, the issue here is that since she will have access to iCloud on iPhone 4, all her contacts will start showing up in my phone and vice versa because the phone is setup using my iTunes account. If I create an iTunes account for her, she will not be able to download all the applications that I have already bought. Is there a way to setup her phone using my iTunes account, but back it up to a new iCloud account that I plan to create for her?

Answer 1

1. You can restore an iPhone 5 from an iCloud backup. This will help > http://support.apple.com/kb/HT4859
2. You can both use the same Apple ID for iTunes. What you need to do is have different Apple IDs for iCloud and then you can continue to use the same apps and music and keep you contacts and messages seperate.
Create a new Apple ID > https://appleid.apple.com/cgi-bin/WebObjects/MyAppleId.woa/
On your iPhone 4 go to Settings > iCloud > Delete Account (scroll down) > Sign in with the new Apple ID
Note: I do not backup to iCloud so I do not know how deleting the iCloud account from your iPhone 4 will affect your iCloud backup. It's possible it will delete it but you should be able to create a new one from the restored iPhone 5 if that happens. I suggest you make sure you restore the iPhone 5 from backup before doing anything (e.g. restore from the Wife's current backup or attempting the steps outlined in #2) on the iPhone 4 so if anything goes wrong you still have you data and can make a new backup.
Hope that helps.