I have Xcode 4, and I was wondering if it is compatible with the new iOS 5. Will I still be able to make apps once iOS 5 comes out? Or will I have to update Xcode or something?
You need the latest beta release of Xcode (4.2) and the iOS 5 SDK. You won't be able to submit apps to the app store with this version though so install it alongside 4.0.2.