Apple has been in talks with Verizon about delivering iOS 5 updates via the air, much like Android and Blackberry devices do today. Apple has long required the tethered update to iTunes, requiring you to plug in your device, open itunes, download, and install the update.
One can assume that his functionality is already built into iOS, because the Apple TV currently does it’s updates untethered, and over a WiFi connection. The one thing Apple will need to do is start pushing out incremental updates. Apples update for the iPad 2 for 4.3.3 was over 600MB, I don’t think carriers will be happy with users downloading a 600MB file over their network.
The next thing is that when the phone is plugged into your computer before the update, iTunes will create a backup of the phone just in case a catastrophe happens. I’m thinking this is what Apple is going to use it’s iCloud service for. You can backup your phone to the cloud before the update, or do incremental backups, so if you need to restore or update, your phone will be able to restore from the cloud.
I think this is the right direction for Apple to go in. Doing updates over the air will allow users to update more efficiently and quickly. However, this is definitely bad news for the jailbreakers and unlockers, who may end up having bricked phones if an update is pushed.
Only time will tell, but it is safe to assume that Over-The-Air iOS updates is a reality.