Even though Apple just released their iOS 4.3.5 update yesterday, it appears that they didn’t do anything to prevent it from being jailbroken, and a jailbreak is already possible using the latest version of Redsn0w!
The 4.3.5 update was released to fix a security hold with certificate validation, and apparently that was the only change that Apple made! As iPhone Dev Team member revealed on Twitter, you can jailbreak the new version of iOS using the latest version of Redsn0w, but be warned that it is a tethered jailbreak.