I strongly believe that iPhone is incomplete without jailbreaking it. I’m pretty sure you’ll agree on this point if you are aware of the potential of an iPhone after jailbreak. Most of the iPhone users updated their firmware to 4.1 as there were significant changes in the update and several bug fixes. Well, if you have updated your phone and you badly wanna jailbreak it then at present the only option is to downgrade the firmware to 4.0.1 and jailbreak it. But, this is possible only if you created a backup of your SHSH. You can downgrade your iPhone 4/3GS and iPod Touch 2G/3G using this method and then jailbreak it.
For detailed instructions on how to do so, have a look at the below video by jailbreakmatrix: