Can i update ios on 3g 4.2.1 iphone?

Hi, i have a 3g 4.2.1 iphone with 5.15.04 baseband. Its factory unlocked and i just jailbroke it today using redsnow. My question is, can i upgrade the ios? I'm new to all this, what's is the benefit of updating the baseband? And if i'm actually able to update ios and baseband will i lose my factory unlock?

IOS 4.2.1 is the last OS supported on your iPhone 3G. So you will not be able to upgrade it to higher version.

If your iPhone is factory unlock, then updating the OS or restoring back to remove the jailbreak would not affect your unlock at all.

Yes, you can't upgrade any more

No. 4.2.1 is the last for the iPhone 3G.