Today’s iPhone has a nice article on adding bookmarklets to mobile Safari:
TiPs & Tricks: Add bookmarklets to mobile Safari

However, with iOS5, I found that the steps are a little more convoluted:

1. Add a dummy bookmark using the [->] button in the middle of Safari
2. Copy the code for the bookmarklet
3. Tap the Bookmark button (second from the right in Safari).
4. Tap the [Edit] button
5. Tap on the dummy bookmark you created
6. (x) out the URL on the second line
7. Paste the bookmarklet code on the second line.
8. (x) out the title and name the bookmarklet appropriately
9. Tap [Done] when finished.

UPDATED 01/27/2012 bufferapp has new code.

javascript:void(location.href='bufferapp://?u='+encodeURIComponent(location.href))

I also found that the Buffer code was missing, so I captured it and posted it below:

javascript:(function(){
var%20a=document.getElementsByTagName('head')[0],
b=document.createElement('script');
b.type='text/javascript';
b.src='http://bufferapp.com/js/bookmarklet.v1.js?'
+Math.floor(Math.random()*99999);
a.appendChild(b);
})();void%200