Just to let everyone know that I managed to restore from backup (via iTunes), and everything seems stable so far, running IOS 5.0.1.
It did take several attempts to restore from backup (numerous errors veryfying the backup against Apple's servers, which seem very flakey at the moment - even the page describing the error condition was unavailable due to 'scheduled upgrades'), and eventually the phone booted with what looked like a raw OS (I needed to set up from scratch re: location services, preferred wireless networks etc). But now the restore is progressing well (no crashes so far), and my previously downloaded apps all seem to be installed and working.
I hope this helps others to get out of this irritating predicament. If I was Apple I would be quite concerned about the unreliability of this whole process, why flys in the face of their 'it just works' motto. To recap, my very sub-standard customer experience went roughly like this:
1. IOS 5.0.0 asks me "would you like to upgrade to 5.0.1?". I respond "yes". It doesn't seem that it did any kind of backup immediately before the upgrade.
2. After that completes successfully, the phone crashes every 2 minutes or so, effectively preventing me from being able to do a backup or restore.
3. Eventually, I manage to initiate a restore, but after unpacking the file, it fails verifying against the Apple servers.
4. I click on "More info..." and get redirected to a "resource not availble" error page.
5. After several more similar failed attempts, my phone eventually reboots into a virgin OS, and I manage to restore from backup.
Total elapsed time, about 3 hours. Sad, but true.