The jailbreak community is on fire now. iOS 5.0.1 was just released, and they have already dug in and hacked it. A lot of users were reluctant to upgrade to 5.0.1 for fear of losing their jailbreaks, but it looks like that won’t be an issue for the time being. Before you get too excited, this jailbreak will not work with the iPad 2 or the iPhone 4S. Everyone who owns those devices are still stuck with being jailbreak-free regardless of which firmware they have on their device. For the rest of you, do not upgrade to 5.0.1 if you want an untethered jailbreak.
It also needs to be noted that this a tethered jailbreak. This means that any time your phone restarts or powers off, you will need to plug it into a computer and run the jailbreak software to get it to boot up. Obviously, this isn’t the best case scenario if your phone dies while you are out and not near a computer, but for some people, it’s better than no jailbreaking at all. There is a mod that allows for a semi-tethered jailbreak, and that works with 5.0.1 in addition to 5.0.
If you haven’t upgraded to 5.0.1 yet, then I would suggest you stick with 5.0 as the jailbreak community is saying that is more likely to receive an untethered jailbreak. If you upgraded by mistake and are stuck on 5.0.1, then you can download the latest jailbreak from redsn0w and sn0wbreeze. If you need to install the jailbreak, check out redmondpie for step by step instructions. If you are familiar with jailbreaking, the steps are the standard affair.