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Without the update, your i Pad, i Phone, and/or i Pod touch is susceptible to a man-in-the-middle attack, where a malicious program acts like a trusted program, fakes a certificate, and tries to steal information from your device. Any app, like a banking app, that uses SSL is vulnerable.This was actually a bug that affected all Apple products, and has since been patched.
When your device starts up again, the patch will have been applied and you won't have to worry about any data-stealing hackers for the time being.
However, if you're jailbroken like me, you've probably risked having your data hacked because you're too lazy to jailbreak again.
In the past, you'd have to backup your device, install the Apple update (which removes jailbreak), jailbreak your device again, and restore from a backup. Even bigger if you forgot to backup all of your customizations.
It's not a perfect solution, but it's better than nothing.
Note: While jailbreaking is a relatively safe process, and usually when things go wrong you just have to reboot the i Device by holding down both the Home and Power button until it reboots to fix things, if the worst does happen and you kill your i Device, neither I nor Apple can help you. The latest i OS release is i OS 5.1.1 and I suggest you update to this before carrying out the jailbreak.