Many sources describe holding the Control key down while rotating to control rotation by 5 degrees increments. I cannot get this keyboard shortcut to work in Blender v2.75. The increment button on the snapping menu does work, but the keyboard shortcut does not seem to work for me.
If you choose to rotate with 5 degrees precision (or another transform operation), you should hold Ctrl while performing transform operation; if holding Ctrl and Shift rotation will happen by 1 degree. Snap during transform should be turned off, but its option Increment should be checked:
Transforming without precision will be done in case of other snapping option selected.
If you turn on Snap during transform, you can perform transforms with precisions without holding Ctrl:
You may want to read about performing transforms with precision in manual.