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Musclenerd of the iPhone Dev Team has confirmed that iOS 5 can still be jailbroken using Geohot’s Limera1n exploit currently used to jailbreak all idevices. The only down side to this is that it will be a tethered jailbreak meaning if your jailbroken iOS device goes dead, to reboot in a jailbroken state again you must have it connected to a computer and use redsn0w or other jailbreaking program to boot up.
Redmondpie States:
According to his initial testing, Cydia appears to be working just fine on his jailbroken 4th-gen iPod touch, he managed to install SSHing utility app called iSSH successfully.
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