"Therefore $250 in penalty to have and extra $5000 in my TFSA now instead of January 2010 or will I be taxed on the profits made with the overcontribution when I sell. "

You should be called "Slydog" not corndog. :) I think you should tread very softly on that one and know your facts dead to rights. You most certainly don't want Revenue Canada on your tail. They can destroy you. Some of their employees consider it a divine mission to do just that. I'd call them and ask them directly or seek advice from a good CA.