If you wish to jailbreak your iPhone, recommend to perform the upgrade now.
To jailbreak your iOS, the untethered jailbreak released pod2g , details of instruction here. Excerpt here for your convinience:-
Step 1: Download Redsn0w 0.9.10b3 for Windows from this link and Redsn0w 0.9.10b3 for Mac from this link and save the application in a folder named "Redsn0w" on your desktop.Step 2: Double click the Redsn0w zip file and extract the application to the Redsn0w folder. Navigate back to the Redsn0w folder and launch the Redsn0w application.Step 3: After launching Redsn0w, click on the Jailbreak button.Windows 7 users should run the exe in Windows XP compatibility mode (right-click on the Redsn0w exe and select Properties, then select the Compatibility tab and select Run this program in compatibility mode for Windows XP). Windows XP and Windows 7 users should run Redsn0w as‘Administrator’ (right-click on the Redsn0w exe and select 'Run as an Administrator').Step 4: You will now be prompted plug your iPhone to the computer and switch it OFF. Follow the instructions and click on 'Next' to move to the next screen:Step 5: You will now need to put your iPhone into the DFU mode. Redsn0w will take you through the necessary steps:(a) Hold the Power button on iPhone down for 3 seconds:(b) Now simultaneously hold the Home button and keep the two buttons pressed for 10 seconds:(c) Now release the Power button while keeping the Home button pressed until Redsn0w detects the device:Step 6: Your iPhone should reboot now. Please remember to release the Home button.Step 7: Redsn0w will now start preparing the jailbreak data.Step 8: You will now be prompted to select the jailbreak options you would like. Make sure Cydia is selected and select 'Next' to continue.Step 9: You iPhone will be rebooted again and Redsn0w will now begin uploading the new RAM disk and kernel.Step 10: You will now be notified once the jailbreaking process is complete. Click on the 'Finish' button to exit the application.Step 11: Your iPhone will reboot once again (which could take approximately 5 minutes). After it has rebooted, your iPhone should be successfully jailbroken. You should find Cydia jailbreak app on your iPhone’s home screen.If you're new to the jailbreaking world and wondering what to do after jailbreaking your iPhone, checkout our jailbreak apps category page to find out the apps you can install on your iPhone using the Cydia app. Please note that some of the jailbreak apps and tweaks are still not compatible with iOS 5/iOS 5.0.1 so please be cautious while installing them