CAT5 works quite often when using short distances (under 10 meters). Beyond that you will most likely run into problems. This cable is not officially recommended/certified for gigabit use. Cat5e is the enhanced version which is certified/recommended for gigabit use. Cat 6 too but this can even do 10 Gbit (up to a certain distance).
A good website (better than wikipedia which has a small error regarding cat5 and gigabit) would be the following:
http://donutey.com/ethernet.php
While normally I would agree that Wikipedia is not to be regarded as a reliable source of information. However, in this respect, I fail to see where it is incorrect. The 802.3 specification itself calls out category 5 cable. It doesn't make mention of cat5e or cat6.
From section 40.1, page 151, of 802.3-2008 Section3:
"The 1000BASE-T PHY employs full duplex baseband transmission over four pairs of Category 5 balanced cabling. The aggregate data rate of 1000 Mb/s is achieved by transmission at a data rate of 250 Mb/s over each wire pair, as shown in Figure 402."
Section 40.7 goes on to say:
"1000BASE-T is designed to operate over a 4-pair Category 5/Class D balanced cabling system."
And then, section 40.7.2. says:
"The transmission parameters contained in this subclause are specified to ensure that a Class D link segment of up to at least 100 m will provide a reliable medium."
Maybe I'm missing it, but I don't see anything in here that says Cat5 won't work at lengths up to 100m, unless you're posulating that the 1000Base-T specification itself is incorrect?