The iPhone 4 has an un tethered jailbreak at the moment. I use redsn0w 0.9.10b5.
You could restore and then update your iOS to 5.1 and then re jailbreak but you will have to use the tethered jailbreak at the moment. Tethered is a pain as you will have to reboot every time you power down your iPhone.
My advice is to wait.
The 5.1 brings only small enhancements such as the camera launch on the lock screen and improvements to the fluidity of the iOS.
Many 4s owners were waiting for the battery fix in 5.1 and some say its better and some say its worse !