The Twilight Hack is dead in 4.x. Bannerbomb is the method used to run homebrew without the HBC.
If you upgrade via Nintendo, you'll lose the fakesigning bug in pretty much every IOS except cIOS. Everybody seems to advocate Waninkoko's Firmware Upgrader 4.1, as long as you have enough free space (always read those README files!).
Personally, I update by hand, and selectively install WADs.