I had this issue when I first upgraded my Iphone4 to ios5. All my music appeared on my device as they always have but they would not play. I searched around online and it appears there was mention of unchecking the "sync music" check box in itunes under the music tab (when device is connected) and syncing your device. I then unchecked all my playlists and synced again then started adding back my music from scratch. After that headache - everything seemed to be back to normal and my music was working once again.