Regarding sleep overs: I am the mother of 9-year-old twin daughters (birthday 2-15). Regarding a slumber party, my girls had their first last August and I had 9 little girls here (ages 7 & 8) and it turned out fabulous. I wouldn't have had one any sooner age-wise, because (in my opinion,and other moms that I spoke with about it) it would have been too soon. Younger children have a tendency to want "their" parents late night, which means a phone call home to come and pick their little one up. Also, sleep patterns have developed better, in that the older ages "like" their sleep and tend to go to sleep at a half-way descent hour. We set our "lights out" at midnight and not one of the little girls had a problem with it. They woke up early, rested and happy.
Since your daughter is only going to be 5, I would start out with having just 1 friend spend the night and see how it goes. It also depends on if your child, or the child you have stay over, has any prior experience spending the night away from home, which also makes a huge difference.