Our own Erica Sadun has confirmed that Zibri's jailbreak does work with the 1.1.4 update, released today. We're told that Nate True has tried it out with the new update installed, and that it does work.
So big news for jailbreakers -- update away, because the jailbreak wasn't one of the "bugs" fixed. Although if this update is, as we suspect, laying the groundwork for the SDK release, we may not have to worry about applications not working on the phone too much longer.
Update: While some users have upgraded with no problems, Zibri is asking that users not upgrade until the tool can be thoroughly checked with the new firmware. "People who donated will receive the next version a day before everyone else. Expect a new version in 2 days (3 days for non-donors)," he says.