There is no need of un-jailbreak it before the upgrade.
I've upgraded last saturday. Mi touch was jailbreaked before upgrade, and keeps jailbreaked afterwards.
My device is (was) a Special Offers. I jailbreaked it, disabled the SO, installed the screensaver hack and all works fine (before the upgrade). After the upgrade everything was just fine (SO didn't came back, screensaver was the custom one i set, etc.). Then, I installed the locale hack and now mi touch is 5.0.4 in spanish
