Good news! If you happen to be using the latest version of RedSn0w, you can safely update your iPhone, iPad, or iPod touch to iOS 5.1.1 without losing your jailbreak status. This has apparently been confirmed by Redmond Pie, as well as another iOS developer.
The caching issues have been taken care of, the A5 cache is not a problem anymore. He fixed it by “doing the untether in a single thread and by flushing all the dcache then all the icache in a row at a strategical point of the process.”