Well, the first thing is that you don't have to worry about upgrading yet - there is
no untethered jailbreak for the iPad1 on iOS 5.0 or 5.0.1 (and no jail break for the iPad2 on iOS 5 at all). There never was one...we're still waiting.
What you missed was the signing window for Apple to approve installing iOS 5.0 on your iPad. Now, all you can install is iOS 5.0.1. If you install it, you will have to do a tethered jailbreak for it, using redsn0w (and this sticky:
http://www.ipadforums.net/jailbreak...tutorial-jailbreak-ipad1-redsn0w-windows.html). That's for a computer with Windows installed. If you want a jail break method only for a Mac, see this new sticky to jail break (again, tethered) with ac1dsn0w:
http://www.ipadforums.net/jailbreak...break-ipad1-ios5-tethered-using-ac1dsn0w.html
It's up to everyone to decide whether upgrading to a newer iOS version (and, in this case, having to do a tethered jailbreak) is worth it. I have upgraded my iPad1 to iOS 5.0.1 and truthfully, it's not that big a deal. But, I only use my iPad for light browsing and some news reading. Others may find the new iOS the best thing. Again, it's entirely up to each person.
What I can tell you is that it is no big deal to run the iPad1 on iOS 5.0.1 with a tethered jailbreak. Mine works perfectly fine and I've had zero trouble with it. Most of the tweaks I was running before I upgraded (I was on iOS 4.3.3) have been updated so they work fine. See this thread for those tweaks that have been updated (the ones that work are in blue):
http://www.ipadforums.net/jailbreak-applications-tweaks/25824-ultimate-list-jailbreak-tweaks.html
Since you have SHSH blobs, you can go back to your old iOS if you decide iOS 5.0.1 is not for you (or that the tethered jail break doesn't work for you). I, personally, won't go back because all the developers, App Store and Cydia ones, are moving on and developing for iOS 5 now. Soon, iOS 4.x will be "old news."
So, in a nut shell: You still have time to decide what to do. You've already missed the big excitement, which was to upgrade to iOS 5.0 before Apple stopped signing it. Since you didn't go to that version, you now can't. Therefore, take your time and decide what to do, whether to stay on iOS 4.3.4 with an UNtethered jailbreak or to go to iOS 5.0.1 with a tethered jailbreak.
Good luck with your decision.
Marilyn