I used sn0wbreeze to jailbreak 4.2.1. Believe me, I was stressed about it as I'd only done one restore on my 3GS before (when I updated from 3.1.3 to 4.0). But the program literally walks you through the process and couldn't be simpler. I also watched a couple of videos on reputable sites (Redmond Pie, iClarified) so that I knew what to expect before I ever started.
This site is an absolute lifesaver...
http://www.jailbreakmatrix.com/. Just click what device you have up at the top in the black area and it will tell you exactly what options you have.
The big caveat here is this. I've got my shsh's from 3.1.3 -> 4.3.5, so I can update to any firmware in between. If you don't have yours saved, you'll only be able to update to the latest firmware (4.3.5). I also chose to use sn0wbreeze because it preserves my baseband for unlocking (plus, I'm on Windows). I don't need the unlock, but if I ever decide to sell, it may help the next owner out.
If you've got your shsh's, don't stress over updating. Just do some reading and watch some videos and you'll feel much better about it.