The Dev-Team has updated redsn0w with support for the latest iOS beta. Keep in mind that the jailbreak is tethered, so it’s a good idea to hang back at iOS 4.3 if you want to retain your wireless freedom. There is currently no ETA for an untethered iOS 5 jailbreak, but it will likely be released only when iOS 5 is publicly available this Fall.
Update #5: redsn0w has been updated to 0.9.8b5, adding support for Apple’s new iOS5 beta5 (point it directly at the beta5 IPSW). Please use this only if you’re a jailbreak app developer with a legit Apple dev account, and remember it’s a tethered jailbreak for now!