NOTE: This ultrasn0w update only supports existing basebands. There is no new unlock at this time.

"We’ve updated ultrasn0w to be compatible with iOS5, which came out a few days ago. While ultrasn0w 1.2.4 doesn’t add support for any new basebands, the update is required for any ultrasn0w unlockers trying out iOS5 (it remains backwards compatible though, so you should be able to use it no matter what firmware you have).

The supported basebands for the iPhone 3G and 3GS are 04.26.08, 05.11.07, 05.12.01, 05.13.04, and 06.15.00. The baseband supported for the iPhone4 is 01.59.00.

Remember, the only way to get to iOS5 while preserving your ultrasn0w-compatible baseband is by using a custom IPSW. redsdn0w now has the ability to create such a custom IPSW for you (at least on Macs…the same capability for Windows will be coming soon).

The majority of people who use ultrasn0w at iOS5 right now will probably be those with old-bootrom iPhone3GS devices, since they already have an untethered jailbreak via redsn0w. For everyone else, the iOS5 jailbreak is currently tethered and you need to “Just boot” tethered with redsn0w every time your phone reboots. That’s not always easy to do if your phone reboots while away from home!

Note: there’s a special “trick” that iPhone3GS owners with baseband 06.15 need for iOS5. During the new setup screens you see when you start iOS5 for the first time, you’ll be asked about Location Services. Be sure to select “Disable Location Services” when asked! Later on in the setup, you’ll have the chance to turn on Location Services again when asked if you want to use “Find my iPhone”. It’s fine to turn it back on at that point, if that’s your desire (or you can always go in and enable it in Settings.app).

Also, some iPhone3GS users with the 06.15 baseband may have tried to install iOS5 using a stock IPSW (even though you should never ever try to use a stock IPSW if you’re an ultrasn0w unlocker). If you did try this, your baseband is probably in an inconsistent state, and you’ll need to reflash the 06.15 baseband again (using redsn0w). Be very careful if you use redsn0w to reflash the iPad baseband — don’t interrupt the process1 And please avoid using stock IPSWs in the future Unlockers should never go near stock IPSWs."

Source- ultrasn0w