Thes release of iOS 5.0.1 marked the first time that public upgrades to the operating system that powers the iPhone, iPad, and iPod touch can be installed directly on those devices, without requiring a visit to iTunes.
Apple promised such over-the-air updates as a part of iOS 5, and in practice, the new iOS upgrade process is simple and straightforward. Macworld staffers did note that the 5.0.1 update appeared in iTunes about 20 minutes prior to becoming available over the air, but the wait may well be worth it: Not only are over-the-air updates simple to install, but they're also deltas. That means that the updates contain only the minimum data needed to upgrade, instead of the complete operating system. For the 5.0.1 update for a GSM iPhone 4, the over-the-air update weighed in at 44.6MB; the full download via iTunes was 790.7MB.
Of course, it's highly possible that the folks who work at Macworld are more obsessive than the average iOS device owner about ensuring the latest software updates are installed as quickly as possible, so the short delay before the over-the-air update becomes available may be of less consequence or import to you. Note, however, that we haven't yet seen any of our iOS devices notify us that an update is available, and Apple didn't immediately respond to our question about whether such an alert is part of the over-the-air update functionality. For now, though, assume that it's your own job to know when an iOS upgrade is available.
Here's how the over-the-air upgrade process works. On your iOS device, launch Settings, tap General, and then tap Software Update. After a brief moment, your device will display details of the update, along with a Download And Install button. After you tap it, you may need to agree to specific Terms of Service that your device will present if necessary. iOS will suggest that you plug your device in during the upgrade process to conserve battery, but that's not a must. Just be certain your device won't run out of power during the potentially lengthy upgrade process; unknowably bad things await those whose upgrades are interrupted by battery woes.
Once the download begins, you become merely a silent observer to the process. With the relatively small 5.0.1 update on a high-speed Internet connection, my download took less than a minute. The second step, which starts automatically, took even longer, as Software Update reported that it was "Preparing Update."
You can use your device during this part of the process; iOS will prompt you when it's ready to install the software. When that prompt appears, you get ten seconds to choose whether to install the update now or later. If you don't choose within those ten seconds, you're installing it now.
At that point, you'll see a Verifying Update message for several seconds, and then your device will restart to the familiar Apple logo. After a few seconds more, you'll see the Apple logo along with a progress bar beneath it. Once the progress bar fills up--which may take some time--your device restarts to the Apple logo again. (On some devices I upgraded, a second progress bar then appeared, followed by a second restart. But this didn't happen every time.)
Once your device restarts to your lock screen, you're good to go. You can confirm that you're up to date by going back into Settings -> General -> Software Update.