Jailbreak works for all firmwares
Even 1.1.4, but I think in 1.1.4 when applying jailbreak, the "keyboard" lags...so I suggest you stay in 1.1.3
What exactly is jailbreaking?
When talking about jailbreaking, we talk about breaking the iPod Touch and/or iPhone free from the clutches of Apple. In other words, we could say gaining read/write access to the devices in order to install your own programs.
That would be like third-party apps.
After you jailbreak your device...
After jailbreaking it, what you are now able to do is that now you can run and unlock software on your iPhone, and you can install and run third party apps.
For more information on how to do this step by step take a look a the guide...
(Only for Mac)