I upgraded from a K20 in January. I have written a couple of times that I had made the decision to not upgrade being really satisfied. Then I ran across a sale at Samy's Camera in LA - some wonderful person made a post here, that they had a tremendous price. I went to their website, saw $750 and just ordered as I had already saved up. I am in no way sorry that I placed the order.
I do low light ambient landscapes / cityscapes and the ISO 80 and great dynamic range of the K5 is really worth wild. It is everything folks say it is. The other aspect for me may be small to others, but they moved the external wired shutter release from the left to the right hand side of the camera, so now it does NOT interfere with an L Bracket. This is great news for me. The user interface is REALLY improved, and the electronic level is absolutely wonderful (I was not really thinking that I would use it that much, but its great - especially how it is integrated into live view). I had dismissed the live view capability, but when used on a tripod it really shines (especially when panning and in the dark). The one main improvement would be the addition of focus peaking from the K-01, and a better design of the SD card door (the K20 was an absolutely perfect design). I would expect this to be in the K5 replacement. Overall, the sensor over the K20 is really that much improved. Autofocus I believe is improved substantially, but probably still behind Canon and Nikon, however I am not the best judge since I tend to focus to infinity anyways (one benefit of landscapes).
Now with the pending replacement of the K5, you will get camera envy with the new model. I bought the K20 at the end of its model run for a great price. For me that is the way to go. I skipped a model, the K20 was still VERY useable for everything I wanted it for, and could have pretty much waited another 2 years for the end or the K5 replacement (in order to get some good pricing). For me and what I do, this is working out exceptionally well. There will always be a capability that I could use, but is it critical? For me the K5 has everything. I still feel a bit guilty about upgrading, I sold the K20 to a good home (she wanted to photograph antique teacups in her home studio, and the K20 is perfect for this), so for right now all is well here in Tumbleweed.