Update and Re-Jailbreak Fears? No Worries.
It's true that once you have jailbroken and added Cydia apps to your iPhone, it's hard to imagine not having them anymore. Doing anything to compromise the presence of these apps on your phone is downright scary. Have no fear, go ahead and update to 3.1 and rest assured that you will still be able to use all of your Cydia apps.
First, before you go for the 3.1 update, get the Cydia app aptbackup. Running it only takes a few seconds. Your Cydia info is now all backed up.
Make a paper list of all of the Cydia apps that you have on your iPhone.
Now update your iPhone to 3.1.
After you have finished the update, re-start once again just to be sure, and go through the steps to install redsn0w 0.8 and jailbreak your iPhone again.
When you have completed that easy task, just fire up Cydia and go through the process of re-downloading the Cydia apps that you had previously placed on your iPhone. When they download they will give you the alert "selecting previously de-selected packages". This is aptbackup working it's magic.
When you have finished, all of your Cydia apps will be back on your iPhone, and the settings for apps like SBSettings will even be set exactly as they were before the update. All of your Cycorder video will still be present and accessible, etc, etc.
So have no fear, aptbackup>update to 3.1>hit Cydia up>re-install apps>be happy.
