Apple had released iOS 5 Beta 6 couple of weeks ago for which complete Changelog and
Sn0wbreeze Jailbreak Procedure was reviewed. The Jailbreak procedure using SnowBreeze for iOS 5 Beta 6 contained minor bugs and crashes therefore Muscle nerd had come up with latest release of Redsnow 0.9.8b6 code named Jetblue was released last week. This release of Redsn0w provides tethered boot support for iPhone 4, iPad, iPad 2, iPod Touch 3 and iPod Touch 4 meaning you have to reconnect your iDevice with PC/Mac to boot. However recently MuscleNerd has announced that explicit support has been added for tethered jailbreak on iOS 4.3.5 and 4.2.10 therefore you no longer have to point Redsn0w to IPSWs of iOS 4.3.4/4.2.9 when jailbreaking.
Update #7: Apple updated the iPad1 iOS5b6 IPSW without changing its version number or filename, so we’re releasing redsn0w 0.9.8b7 to handle both the original and changed IPSW. We’ve also added explicit support for a tethered 4.3.5/4.2.10 jailbreak (instead of pointing at the 4.3.4/4.2.9 IPSWs) and fixed a 4.2.10 problem.
Redsn0w by DevTeam has released 7th Edition of Beta Jailbreak for iOS 5 Beta 6 launch and is expected to release final Redsn0w 0.9.8 on final iOS 5 release (may be with untethered support alteast for iPhone 4 and below).
Follow the procedure here for using Redsn0w.