1) Delete useless apps:
Delete unwanted / unnecessary apps from your device. To delete click and hold the app for few seconds, all the apps will shake with an X mark on the left hand side. Click the X mark and confirm deletion.
2) Sync your iDevice:
Connect your iDevice (iPhone, iPod or iPad) to the computer, open iTunes. Your phone should be displayed in the iTunes and it should be the same computer which you used for the initial sync or the regular sync. Click sync. This will transfer all your purchased (paid / free) apps from iPhone to iTunes and vice versa.
3) Back up your iDevice:
Check if you already have a back up. Choose Edit → Preferences in iTunes and go to Devices tab and check for the back up file. Otherwise back up your device by right clicking on the device name in iTunes and select Back Up. This will take some time depends on the data in your device. Be patient.
4) Download and install iTunes (10.5):
Download and install the latest version of iTunes from apple.com or through the apple software update in your computer. Open iTunes and click iTunes store, give your apple user id and password. (If you had forgotten your user id, you can fix it in this link)
5) Upgrade to iOS 5:
After completing these steps, open iTunes, connect your iDevice. Select the device in iTunes and click Update button. It will prompt to download only or download and install. Choose download and install. Sit back releax with a few songs in your iTunes library.
Guys, this is a very quick inputs for the iOS5 upgraders. No much time to take detailed screen shots. These steps will save your time and energy during upgrade. Shoot me your questions in the comments section, will try to help you.
More detailed steps: iOS5 upgrade