is itunes forcing to upgrade to the latest firmware now, 5.0.1 or whatever it is, i want to upgrade to ios 5 and jailbreak my iphone 4 ! dont want to start the process only for an error to occur tho and leave me with a crappy stock iphone
When you upgrade using iTunes, you will lose your jailbreak (unless you need to preserve baseband which will require using Sn0wbreeze which incorporates the re-JB into the custom IPSW).
You should sync/backup all your stuff in iTunes first as it will need to be restored back
If you have errors now, choose set up as new and do not restore your settings back
iClarified.com for a tutorial