Since Lion among other stuff dropped Java Runtime, you'll need to install it for CS5 to work. Upon opening CS5 the first time 10.7. prompts you with an option to install Java. After installing it, CS5 works fine.
Does that include saving your work? I got some links in tweets earlier from adobe saying they had noted issues with saving in PS / IL / ID CS5 .. Im downloading it now but Im tempted not to install until these issues have been fixed.