I highly recommend using PkgBackup (with the Dropbox method) to backup your Cydia apps and settings. It works very well and is worth the price. Just back up your stuff to Dropbox. Update your iPhone. Jailbreak with RedSn0w. Download PkgBackup from Cydia (you won’t have to pay again), and tell it to restore from Dropbox. Your iPhone will immediately be back to the jailbroken awesomeness it was before, with all your settings and apps and icon placements.

Backing up jailbroken iPhone in preparation for iOS update

Redsn0w Untethered Jailbreak Release Addresses iOS 4.3.1, But iPad 2 Owners Must Wait

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