Group Messaging (available in USA only) does what iMessage does but using regular texts: it's a 'chat-like' group messaging, all recipients see the other and replies go to everyone. The option existed also in iOS4. To work it needs MMS. It's limited to max 10 recipients.
The problem with iOS5 (that caused a lot of issues for the users of my group texting app, Group Text!), is that even turning off Group Message, iOS5 still does the same thing, unless you turn off MMS too.
Apple is working on the problem. In the mean time if you want to send regular texts to group of people you have to turn off MMS (and Group Messaging if the option is available).