I managed to get my IPhone 4 updated to IOS 5 yesterday morning once the load on Apple subsided. However the process has to now be repeated twice for two other IOS devices. The first attempt on an Ipad 1 failed with an unknown error 3200. The time needd to do the upgrade should not be underestimated and could be as long as an hour (and I suspect longer for devices with more data).
As part of the first deveice setup though I entered the Icloud – you can get very detailed steps here. You need to select the items you wish to sync to the cloud through a new icloud option under settings.
PS – a second update attempt on the ipad 1 ended with an error -35 – however the IOS5 update has worked but initial tests show that updates are no longer working from the device.