It looks like the just-released iOS 5 beta 4 is an OTA update, with Apple pushing the bit-differential/delta file over the air, over 3G... if you can connect. Lots of people can't, according to Twitter, and are getting "Try Again" errors. When it does work, however, it seems to work well.
Also, many of you are telling us you're having no luck updating via iTunes or Xcode, with "this device isn't eligible" errors cause all manner of frustration.
If you get your update on using either method, let us know!