Yes, version 3.1 is the last version to support PHP 4.
For WordPress 3.2, due in the first half of 2011, we will be raising the minimum required PHP version to 5.2. Why 5.2? Because that’s what the vast majority of WordPress users are using, and it offers substantial improvements over earlier PHP 5 releases. It is also the minimum PHP version that the Drupal and Joomla projects will be supporting in their next versions, both due out this year.
Based on that announcement page, I’d actually expect 3.2 to be released a little later this year (i.e. early Q3), since 3.1 ended up a few months later than that page projected (not a knock on the dev team, FYI – just conjecture on my part).