I just had to get a replacement 4S due to lock button stopped working. Replacement came on old 5.0.0 so I activated it, restored my backup/media, and then updated my OS to 5.0.1.
I think you need to activate it first (think you need data set up). Unless you just plug it into iTunes and update it that way. Maybe it will let you do that. I'm assuming you need to activate first, though.
I wouldn't upgrade if you want an untethered jb . I'm reading stuff that it's only possible as of right now for 5.0.0 and 5.1 was just dropped to devolpers