I believe that if you are still running 4.xx iOS, then you have to update through itunes to get to iOS 5.
Hopefully those who have iphones can clarify this process.
I'm most definitely NOT a VZW employee. If a post answered your question, please mark it as the answer.
Went into Settings, About, Version (I have 4.2.10). I don't see any Software Update incon. However, when I go to the App Store via plugging into computer, it suggested upgrade. My concern would be "blowing up" my settings, contacts, etc. Your thoughts?
First, make sure iTunes is up-to-date on your computer. It's also always a good idea to make sure your iTunes Library is also backed up before major updates.
Next, before you download the iOS 5.x update, be sure to back up your iPhone, either to your computer or to iCloud. In case you have a problem after the update and need to reset your iPhone, the backup can save you.
Then download and install iOS 5.1 (as of 4/17), following the instructions on your computer and phone.
NOTE: After I upgraded to iOS 5.1, I wasn't able to make or receive calls OR txt. *228 didn't work (the call wouldn't go through), and #PMT and similar functions didn't work either. Although I tried the reset from the phone as well as a restore from backups on my computer (I had four backups to choose from), nothing worked. Verizon Support recommended the same steps, and the only thing I hadn't tried was to Setup as New iPhone in iTunes (instead of Restore from backup), so we did that, and still nothing. I had full bars and the Verizon 3G appearing in the upper left corner the whole time. Wi-Fi and browser functions worked.
HOWEVER, after shutting down the phone overnight (my plan was to take it to the Apple Store the next day because it's still under warranty), when I turned the phone back on, EVERYTHING worked. Perhaps the phone needed a cool down after the update? Who knows. Just thought I'd add that because I saw in other discussions others had phone/txt problems after iPhone updates but I didn't see this particular result there.
Now the phone works beautifully!