Here's one thing to think about: What does you app do? If it's something that is going to run poorly on older devices, the ones that aren't upgradable past iOS

Here's one thing to think about: What does you app do? If it's something that is going to run poorly on older devices, the ones that aren't upgradable past iOS 4, then I would say only target iOS 5. More people are updgrading their devices every day and that means they're getting the latest version of the operating system. If you'd like to rely on rumor, think of all the people that will be upgrading after WWDC in a few weeks. I say go for it, you'll have a large enough install space as it is with iOS 5, I wouldn't worry about your lost users.