You can now jailbreak iPhone 3GS 4.3.2 using Redsn0w. Although there is no official update yet, it turns out that Redsn0w is iOS 4.3.2 compatible on iPhone 3GS. Since Apple has patched untethered jailbreak exploit in iOS 4.3.2, this will be tethered jailbreak for New Bootrom users while Old Bootrom users can enjoy the untethered jailbreak iOS 4.3.2. Here is the guide:
Jailbreak iPhone 3GS 4.3.2 iOS
Before you Begin:
- Download iOS 4.3.2 firmware for iPhone 3GS: iPhone2,1_4.3.2_8H7_Restore.ipsw
- Download iOS 4.3.1 firmware IPSW
- Download iTunes 10.2.1
- Download Redsn0w 0.9.6 RC12
Step 1: Update iPhone 3GS to iOS 4.3.2 IPSW. (See: How to)
Step 2: Launch Redsn0w and browse for iOS 4.3.1 IPSW (not to iOS 4.3.2). Then click Next.

Step 3: Redsn0w will show options in next screen, select Cydia, others are optional.
Step 4: Switch your device off and connect it to the computer and click next.
Step 5: Now you will need to put your device in DFU mode. Redsn0w will show you on-screen instructions for help. You will have to:
- Press and Hold Power button for 2 seconds
- Keep holding Power button and press & hold Home button. Hold both these buttons for 10 seconds.
- Now Leave the Power button but keep holding home button for 20 more seconds.
Step 6: Redsn0w will detect the DFU mode and will begin the process to jailbreak 4.3.2.
Progress will show on your device. Once, complete you will have to boot tethered using tethered boot utility.