Just wondering if anyone knows what is the different between Objective C 2.0 Garbage Collector and new Automatic Reference Counter in IOS 5 SDK ?
ARC is not a Garbage Collector. It is better to think of it as manual reference counting (retain/release/autorelease) calls which are added by the compiler. It also uses some runtime tricks.
If you are completely new to ObjC on Apple systems: All of Apple's Objective-C types use reference counting, but there are multiple variants now. Before ARC, and before GC, all we used was manual reference counting (MRC). With MRC, you would explicitly retain and release your objects. MRC was difficult for some people, particularly those who had spent little time managing their memory explicitly. Therefore, the demand for simpler systems grew over time. MRC programs also require that you write a good amount of memory management code, which can become tedious.
See Brad's excellent answer here for some more details.
is IOS 5 SDK also use Objective C 2.0?
Yes, but the ObjC Garbage Collector is not and was never an option on iOS.