We even heard that the scanner will be situated into a capacitive home key made of sapphire for the next iPhone. Judging from the leaked front panel of the iPhone 5S yesterday, however, the home key cutout seems to be absolutely the same as on the iPhone 5.
Of course, that doesn't preclude the home key/fingerprint scanner combo, and the patent filed by Apple in February now seems to shed some light on the matter. There Apple describes an encapsulation technology that would seal off the scanner sensor, its conductive bezel and accompanying paraphernalia in a tight package, pretty enough for mobile use. Whether or not this will translate into a home key knob with the technology, or something totally different, remains to be seen when Apple announces the iPhone 5S.