I've only been playing around with iOS 5 for a few hours, since the update took forever thanks to the infamous "Error 3200," so this is just some first impressions.
What I Like
Android's Notification Center
Notifications now appear at the top of the phone, and you can swipe down to view them (and various widgets) at any time. So that's nice. And exactly the same way it works in Android.
Picture Editing Controls
You can now crop pictures and perform simple retouching to them directly from iOS. Fairly nice. I'd like to see more integration with iPhoto - specifically, I'd love to be able to add captions and tag people directly from the phone - but being able to perform simple fixes to pictures and email them directly from the phone is a nice addition.
What I Don't Like
The horrible, awful, terrible update process
That was an ordeal. Even ignoring the "3200 error" that prevented me from installing the app for a good seven hours, you still have the several hours required to sync all the data that used to be on your phone back onto your phone.
Thankfully this should be the last time anyone has to go through that process, as iOS 5 finally brings over the air updates to iOS. (Hey, look, it's another Android feature!) But the update process was horrible.
If you don't use it, you can't just shove it into a folder to prevent it from wasting space. No, the Newsstand is instead a "special" folder, a folder that exists solely to contain certain "special" newspaper apps.
I might have liked the Newsstand if it were, in fact, an RSS reader, but it isn't. Instead, it's just a special folder to hold special apps.
What I Haven't Tried Yet
Conceptually, it's enabled. I haven't done anything with it yet, but I have turned it on.
Built-In Twitter Support
You can now tweet various things directly from the app that's displaying them. (For example, you can tweet a link directly from Safari, or a picture directly from Photos.)
This is a somewhat subtle feature, but it appears to be a special bookmarks folder that's synced between devices. Not sure how well that works, but I like the concept of a "todo list" of articles to read later. Especially when you find an interesting article that's too small to be read from the comfort of your phone and want to remember to save it for later.
Since I have an iPhone 3GS, I feel it's safe to say that you don't need to worry about iOS 5 making your 3GS unusable. It's
sluggish at times, but it's still usable. (Update 2011-10-17: I take back that "sluggish at times" bit. iOS 5 frequently halts and freezes for a second or so. It's still usable, but it's nowhere near as smooth and problem free as I had thought based on limited usage.)
Beyond that, there's a lot of new stuff hidden in iOS 5 and iCloud, so it's hard to say how much of an evolution iOS 5 is over iOS 4 after only using it for a few hours.