Works, but is a little weird.
I'm playing with 6 tabs now on a v1 iPad (MC496LL) running iOS 5.1.1:
IWT, NY Times, Balloon-Juice, Brad DeLong's blog, Google News, Google Finance
It can't keep all of them loaded at the same time. Switching between them is interesting. The existing content in the switched-to tab goes grayscale before it is cleared and reloaded. Reloading the tabs is fairly quick, but there would be the same old issues with forms being wiped out, etc., in switching between them.
256 MB is too little RAM. Oh well.
Cheers,
Scott.