A little helping hand please

Hi, I bought my iPhone second hand about 6 months ago. When I purchased it I noticed it had Cydia & Loader on it. After a little research I found that these meant my iPhone had be jailbroken (SWEET!!!!)

The only problem I have is that I have NO IDEA how it was done!!!!!! and after reading more on here there seems to be loads of different methods to jailbreak! (give me a Wii to hack any day of the week lol)

Is there a way to find out which method my iPhone was jailbroken with as I would like to update the ios because there are some apps I have found that need 4.2 and I cant get them yet :(

Ok, so the fone info I think you might need to know.

iPhone 3GS (obviously lol)
ios 4.1 (8B117)
Model MC131B
Modem Firmware 05.11.07

What I am after is information on how my fone was jailbroken, if I can update it, how to update it without losing data and apps, will ios5 be worth getting?

sorry for loads of questions and sorry to the mods if this is in the wrong section

Many thanks in advance and more to come if anyone can help me out.
If it is easier for you, I'm available on MSN messenger or Skype to talk to :)