Get Appsync and transfer purchases to iTunes. If you wanna backup your saves use Appbackup. I recommend to NOT update your ios to 5 because there is no untethered jailbreak for it. If you must upgrade for some apps to work, iOS 4.3.3 is the higest firmware that has an untethered jailbreak.
If you still plan to do a tethered jailbreak, use redsn0w,sn0wbreeze or ac1dsnow to jailbreak it. I also recommend after jailbreaking to download semitether on cydia. What it does is normally if a tethered jailbreaked device turns off, it wont be able to boot and you will have to rejailbreak it, which could be a big problem if you don't have a computer nearby. What semitether does is that it allows a tethered jailbreaked device to still boot into iOS even after a reboot. However things like cydia apps and cracked apps WILL not be able to be usable untill a rejailbreak. Also Safari won't work either untill a rejailbreak. Note the "SemiThether" is only for the option if you plan to do a tethered jailbreak.
