I understand to upgrade songs in my library I need to delete from library, but not the cloud, and double click to re-download and then it does show as 256 kpbs. This of course being the songs on my computer's local drive. But..for my iphone 4, which does have iOS 5.0.1 the songs are still the original lower quality. I can't delete and re-download my iphone's songs via iTunes, but can on the phone itself. And even after I do this on the phone and resync it doesn't show a the 256kbps. It shows a "!" next to the song and I can't play it in iTunes, but I can on the iphone. Link to screenshot:
http://i.imgur.com/9Lmj1.png
http://i.imgur.com/9Lmj1.png