If your iPhone is on a tethered jailbreak of iOS 5.0 and you want to upgrade to untethered jailbreak of iOS 5.0.1 then boy do we have an awesome guide for you, check out the detailed step by step tutorial after the break. 
Full tutorial is below:
Step 1. You must have the latest iTunes installed.
Step 2. Download iOS 5.0.1 for iPhone 3GS or iPhone 4
Step 3. Connect your iPhone to your PC and open up iTunes.
Step 4. While pressing the SHIFT key, click on “Restore” and navigate to the iOS 5.0.1 file that you downloaded.
Step 5. This should restore your iPhone to stock iOS 5.0.1.
Now it’s time for Jailbreaking:
Step 1. Download Redsnow 0.9.10b3 for Mac or Windows.
Step 2. Plug in your iPhone while it’s switched OFF.
Step 3. Open RedSn0w and click on “Jailbreak”.
Step 4. Enter DFU mode. (DFU mode = Press power button while holding the Home button, Then release the power button and continue holding the Home button until your iPhone is detected) or you can also follow the ON-Screen instruction by RedSn0w to enter DFU mode.
Step 5. Check box “Install Cydia” (IF it appears or it will be automatically installed)
Step 6. Wait for Redsn0w to apply the full untethered jailbreak!
Once done, your iPhone will be rebooted into fully untethered jailbreak mode!
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