I have 3 popular, paid for and long time favourite apps (inc. Numbers) that have failed to update a few minutes ago. Two additional apps updated OK, but these 3 refused with the 'incompatible' message. Never had that message before, and with the release of iOS 5 just hours old, I figured it wasn't a simple coincidence and on reading other threads, it seems that I've got plenty of slightly upset/bewildered company.
The suggestion I'm going with is to wait it out a few hours. Once the initial iOS 5 upgrade server load subsides, I suspect my 3 little issues will disappear. Hopefully I won't then be overwhelmed by a major problem upgrading my iOS! :/