I highly recommend the update... here is what I have found so far:
The notifications are cool, and you have the option of getting the new notifications or the old pop ups. With the notification center, you just swipe down on any screen and it takes you to the notifications. What is very cool is that you can still set which apps you get notifications about.
New camera stuff. two biggies - you can now use the volume up button for a remote shutter and you can go to the camera direct from the lock screen, by duoble tapping the button, you get the unlock screen that now has a camera button on it. I was very upset at first, because I couldn't get my zoom to come up, but they have changed it to a pinching motion... i think this is because, where you used to just sort of push the screen for zoom, now that motion activates autofocus.
imessage- I wasn't a huge fan until...
Imessage is free messaging between iphone users. Remember that IOS5 is compatible backwards to 3GS. I don't think it is limited to phone companies~ so no texting rates! I have unlimited texting and that makes my cellphone bill drop, so this isn't a biggie for me, but to some? Also, I had used facetime before, but wasn't a huge fan... it just didn't seem to work all that well. After I upgraded, Omar sent me a message and we ending up talking via facetime... for about a half hour. No problems, lag or connection issues.
Also with OS5 - you can sync your iphone/ipad/ipod touch via wifi instead of having to plug it in... and the phone is available while syncing; no more sync in progress lock!
I am sure there is more stuff than that, but that is what I have found so far... I recommend it!