The Dev-Team has updated redsn0w to version 0.9.8b4 to support the latest iOS 5 beta. The jailbreak is tethered, and should only be used by developers who need to prepare their applications for the public release of iOS 5 this Fall. Please note that Apple does not push OTA updates to jailbroken devices, so you’ll need to update the old fashion way via iTunes.
Update #4: In conjunction with iOS5 beta4 being released to iOS developers, redsn0w 0.9.8b4 is now available for jailbreak app developers. Remember, it’s a tethered jailbreak right now so you’ll need to use redsn0w to boot into a jailbroken state at each power cycle.