On the same day iOS 5.1 was released, a jailbreak was also available soon after. The Dev-Team has oultined everything you need to now about jailbreaking and updating to iOS 5.1. Devices with the A5 chip are NOT supported. So right now you will not be able to jailbreak the iPad 2 or the iPhone 4S running iOS 5.1. 

You will have to use the “Just Boot” method with redsn0w 0.9.10b6 (OS X and Windows); however, if you have an old-bootrom 3GS Dev Team said the jailbreak is automatically untethered. There is also now support for MC models of iPod touch 2G via @pod2g’s steaks4uce exploit, allowing redsn0w to automatically jailbreak MC and MB versions of the device. There are a few things you need to remember—as with all new jailbreaks. For instance, iBooks will not work until redsn0w gets an update.

For ultrasn0w users the Dev-Team warned: 

If you use ultrasn0w for your carrier unlock, be sure to use a custom IPSW to get to 5.1 first! Don’t ever restore to a stock Apple IPSW! Use redsn0w’s “Custom IPSW” button to create a NO_BB_* version of the 5.1 IPSW and restore to that instead of the stock one. (That option is available only to 3GS and iPhone4-GSM owners.) ultrasn0w itself will be updated for 5.1 in the next few days (same baseband support, not 5.1’s baseband).

Below are a couple of ‘rules’ you have to keep in mind when you want to jailbreak your device:

• Soon after 5.1 appears on Apple’s public servers (i.e. iTunes starts to offer it), Apple will stop signing 5.0.1 SHSH blobs.
• If you have an iPhone4S, the basic rule above is really the only rule: you cannot restore back to 5.0.1 once the 5.0.1 signing window is closed, no matter what (even if you saved your SHSH blobs).
• If you have an iPad2 with saved 4.x hashes, you can in fact downgrade to that 4.x but you won’t be able to get to 5.0.1 once the 5.0.1 signing window is closed (even if you saved your 5.0.1 SHSH blobs).
• If you have a device earlier than the iPad2, you can downgrade to whatever version you want, as long as you have saved SHSH blobs for that version. You’ll need the assistance of geohot’s limera1n exploit with tools like redsn0w to get into “pwned DFU mode” and bypass the downgrade restriction.