I just installed an iPhone 4s screen assembly on an iPhone 4 and it worked perfectly, I tested the ambient sensor during a call and it worked fine too. What I had to do is to remove the two legs at the top and the legs on both sides (I tried to cut the legs but in the end I removed the whole metal thing). The I could use the bottom legs and put the screws.
Andrew, I was thinking to do what you explained, but I would not have actually tried if I had not read your comment. Thanks! I bought LCDs from four different suppliers and all of them had the same problem with the home button staying a little low, but now it feels works perfect with your solution.