Jailbreaking allows you to customise and install 'hacks' that affect the way the phone runs, for example putting themes on the phone to change the way it all looks, being able to change the sms alert tone and iblacklist which will allows you to block certain numbers on your phone. Theres many more things you can do too and it is all reversible because if it goes wrong and freezes up, you just plug it back into itunes and restore the backup you made before it froze so there's no risks involved.
The only con I have experienced before (on a 3G) is that if you load a lot of hacks, it can slow down the phone a bit (as they are all running in the background) but as you have the iphone 4 you shouldnt notice any slowdown.
The latest jailbreak (Green Poison) was released about a week ago, ive been using it without any problems
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