According to iOS hacker pod2g, it is now safe to update to iOS 5.0.1, as his unreleased untethered jailbreaking vulernability remains in iOS 5.0.1. According to his post on Twitter, pod2g was successfully able to apply an untethered jailbreak to an iPhone 4 running iOS 5.0.1. iPhone users who wish to use a SIM unlock, however, are advised not to update to Apple’s official 5.0.1 firmware, be it over-the-air or straight from iTunes.
iOS hacker ih8sn0w recommends that users remember to dump their SHSH blobs and APTickets with iFaith prior to updating. The Chronic Dev Team recently demoed the untethered iOS 5 jailbreak, which is hopefully released in the near future. Currently, the jailbreak will focus on the iPod touch 3G and 4G, original iPad, and iPhone 4. Pod2g hopes to make progress with the A5-equipped iPhone 4S and iPad 2 eventually, but currently does not own such devices.
Got an untethered iPhone 4 running iOS 5.0.1. Feel free to update.