Hey Mick, have you happened to try changing to 7.5lbs yet? I just started hanging 3 days ago (quite a few sessions since then though), and I noticed from the 3rd session of 5lbs that it was not enough weight. Just as you said, it feels like I could do 5lbs for a LOOOOOONG time with no problem. However, 7.5lbs gives me a really good stretch. If you are hanging BTC, your ligs should be sore while you are hanging, but you should have some soreness in your ligs post exercise as well.
To answer your question, fatigue is where you can no longer comfortably hang with your max weight (the pain in your ligs is from being stretched to a point that no matter how much prostoglandin your body distributes to them they can not relax any more under the tension and thus can stretch no further). I have not hit fatigue yet and I have done quite a few sets of 7.5lbs. However, I will say that I have been VERY close to hitting fatigue, but it was the last session I did last night so I did not. Had I done more than 3 sessions today, I probably would have though, and had to drop to 5lbs for my remaining sessions (as I am writing this that makes me wish I would have done that :p ). You may not reach fatigue for a while (even using 7.5lbs ……… as MX stated above, he did not get fatigue until he started using 10 - 11.5lbs), but if you are getting a good pull with the weight you are using, one of two things will happen.
1.) The tissues you are stretching will gradually get closer and closer to fatigue as you do more sets because you are getting closer and closer to stretching the ligs to the absolute maximum potential of their hyperextended state(or at least their current hyperextended state which you are aiming to make their normal extended state).
OR
2.) You will start to notice that the amount of weight that you are currently using is giving you less of a pull as time goes on. As your tissues approach the maximum length you can get from a given amount of weight, the amount of stretch from that weight decreases (thus resistance increases). This is mostly caused by your shortest ligs stretching to the same length as some of your (formerly) longer ones and thus more ligament fibers are now taking the same amount of weight, but also a given weight will only pull the ligs so far into their hyperextended state (and as the normal extended state of those ligaments approaches what was initially the hyperextended state, stretch approaches 0). This is when you add more weight.
In the first case, you won’t have to worry about hitting fatigue as you already have done so with your current weight. In the second instance, you will probably fatigue fairly quickly with your new max weight when you first start using it as you are stretching even further those shorter ligs which have already been stretched.
Man, I am tired as hell and was probably rambling, but I hope that helped in SOME way.
Peace