While Safari 5's new extensions feature is getting a lot of buzz, I can already tell you what my favorite new feature is: Safari reader.
Basically, when you're presented with a site that has something interesting to read, but it's all crufted up with horrible layout, ads, navigation, banners, tiny type, etc., a button appears in the URL bar. Click it, and the page fades to black, and the article, presented with nice, clean CSS, slides up for easy reading.
Predictably, some people are up in arms over this feature because it hides their precious ads. These people should listen to Lukas Mathis, who argues that if you're upset about Safari reader, then you've only got yourself to blame for it - if your site was readable, people wouldn't need to click a button to make it so.
In particular, I don't feel the need to click the reader button on Lukas' site. It would be redundant, because his site is so readable. But I've used the feature already today on a different site.