Need some clarification on restoring, upgrading jailbreak,etc

[chkw94]

With new firmwares being released (4.1, and soon 4.2), I want to upgrade my firmware and still have a jailbroken phone. My current firmware is 4.0.1 on a 3GS. I jailbroke through jailbreakme.com

First, what would I need to do in order to upgrade firmware and have a jailbroken iphone on that new firmware?
Do I have to restore the phone, re-jailbreak with the appropriate program, then reinstall all my Cydia apps?

And secondly, what exactly are SHSH? I have heard that if I need to restore my phone, I must restore it "Saurik's way". What does this actually mean?

Thanks, I would really appreciate some clarification. I'm still

 

[eastercat]

Unless you're illiterate, you should start reading through this forum first. Read though all the threads and make note of any questions you have. I suggest you start with the stickies.
When it's obvious you've done your homework, start asking real questions.
Until then, don't upgrade or erase from your iphone.