At this time it’s still a bit complicated, mainly because you need a Windows box to do it, but there is a 1.1.3 Jailbreak available. You will need iBrickr and a spare 30 minutes, but it does work.  Just visit 
http://cre.ations.net/blog/post/iphone-113-jailbreak-released for the details on how to get all those great 3rd party apps back on your newly updated and slightly shaken iPhone.