Decaflon

I haven't upgraded mine and aren't really planning on doing so until the SDK is out and apps like Summerboard are recoded in an "official" way. It's probably safe to do it as you never unlocked your phone to switch to another carrier (that's what makes it bricked, not jailbreaking) but you'd be losing some of the cool apps you've got on there.

what firmware do you have? 1.1.1 or 1.1.2?

1.1.1

It is "safe" in that it shouldn't brick your phone (unless you SIM unlocked it), but you will lose all your jailbraked stuff on it.

I had 1.1.2 jailbroken, but it was acting wonky on me (sound alerts not playing, apps crashing often, etc.) so I was planning on restoring it anyway. I wanted to wait until the SDK apps started coming out, but there was really no jailbroken apps that I couldn't live without, and I just wanted my correctly working iPhone back (which it is after the update).

Rumor has it that someone's jailbroken 1.1.3 already, but they are not going to publish how until after the SDK is released so that Apple doesn't plug that hole with a new firmware before the SDK is released.

If you're ok with restoring your iPhone back to it's APPLE DESIGNED state, then yes it should be perfectly safe... if you're talking about an iPhone running on a NON-AT&T network, then I would have to say.... DO NOT UPGRADE. I have 2 friends using theirs on T-Mobile and BOTH spent 2 days of backing up, restoring and formatting and downloading to get their phones back from the 1.1.3 bricktown.

1.1.3 IS jailbroken already but they're stalling so Apple cannot release a block before we get the SDK.