Apple decided to have a verification server OK every install os iOS 5, but under estimated demand, dropping users with error 3200 'unknown error' which is a code not listed on Apples knowledge base. Actually, of you know where to look its one of the poorly documented 'cannot contact server, codes.
This does not bode well for iCloud.
Beyond that, it's the usual iOS update story – A set of great features which would have been basic included features on any other system but have been withheld for half a decade by Apple, and a set of features that have been removed from some devices purely to make the newer models seem more attractive. In other words, the Apple 'you are being rewarded with less beatings' business model.