So my iPhone 4, which is on 4.01, unlocked BB 01.59.00 with ultrasn0w.. I'm having some software issues, especially with Cydia. Its been well over a year since my last firmware update... and I have all my SHSH 4.x keys...

So, because I'm in need of a restore to start fresh, I'm wondering if its possible to safely go to 5.0.1? I realize it will be a tethered jailbreak - but I'm unclear if updating to 5.0.1 and preserving the baseband at 01.59.00 is even possible - all the guides seem to explain the procedure with 5.0 which apple is no longer signing... and I feel better asking and getting the proper response instead of making any unclear assumptions.

If not, I can go to 4.3.2 and be untethered, and that I know how to do.

so the short: Is upgrading to 5.0.1 and staying at 01.59.00 possible to be unlocked and jailbroken?

You can upgrade to iOS 5.0.1 and block the baseband upgrade (TinyUmbrella or make a NO_BB FW in Pwnage). IMO, it's worth saving the unlockable baseband, but it's a lot of hassle to do so. It will add a lot to the resale value of the device, but if you're not concerned with ever selling it and are not concerned with unlocking, then you can go ahead and upgrade to 5.0.1, allow it to upgrade the baseband, and then redsn0w to jailbreak.

You're correct, Apple is not signing 5.0, and even if you had an SHSH it wouldn't work -- iOS 5.x is not susceptible to the same type of man in the middle SHSH replay, so there is no known way to restore back to iOS 5.x revisions that Apple isn't signing.

Many thanks for the quick response. I would need to be unlocked because I'm using T-mobile USA (which I forgot to specifically mention in my original post).

Looks like I may be heading towards 5.0.1 I sure wish it was untethered!

** AGAIN THANKS FOR CLEARING IT UP FOR ME **

No prob -- the good news is that while it's still tethered, a semi-tether does exist for it -- so you can at least be safe knowing that in the worst case you can still make a phone call. My understanding of the solution is that it does cause problems in a few other areas while you're booted semi-tethered, it's definitely good to know that the phone can make phone calls in a non-tethered-boot state.

Not 100% certain that the semi-tether lets you make a phone call if you're using ultrasn0w to unlock, though, so the semi-tether may actually not be of much benefit to you.