Prodigious iOS hacker pod2g just posted a video demonstrating an untethered iOS 5.0 jailbreak. Currently, iOS 5 devices other than the iPad 2 and iPhone 4S can only be set free with the help of tethered and semi-tethered jailbreaks. Now the question is, how long before it's released.
Update: Pod2g has returned with some added detail. First off, the exploit used is "user-land," not on the kernel, à la the Safari-based jailbreakme.com. The next steps will be upgrading the third-generation iPod touch and iPhone 4 to iOS 5.0.1, followed by doing the same for first-generation iPad and fourth-generation iPod touch. After that? Research on the iPad 2 and iPhone 4S.