I just did the iOS 5 update for my 3GS and even though it took about an hour there were no issues and the phone seem very speedy indeed considering it's an old model.
I can't seem to move the Newsstand app into an folder though...
Edit #1: ...Which I've just worked out, it's a folder in itself. Makes sense now
Edit #2: ...and my AltAzAlign app works nicely too (even though I had already tested it on the beta iOS 5
).