And i want to upgrade? i dont really understand how it works...ill certainly be forced to re-jailbreak if i update right? i just dont wanna lose my contacts.
The way updates are applied don't change when you jailbreak. Just hit the "update" button (like always) and off you are. You'll have to check if it's possible to jailbreak the firmware version you're updating to though, because you'll have to redo your jailbreak once you update.