According to the official iPhone Dev-Team blog:
Update #12: For those of you who experiment with your own custom ramdisks using the -r command-line option, version 0.9.9b4 adds auto-detection support for iOS5. This is needed because iOS4 and iOS5 treat the root partition differently (it’s encrypted in iOS5). redsn0w will now upload the correct iOS5 kernel by itself, but it’s up to your own launchd to determine if it needs to mount using the old or new partition scheme.You can download Redsn0w 0.9.9b4 for Windows and Mac from the given links below:
redsn0w now also accepts both native and img3-encapsulated versions of files you provide via the -r, -k, and -d command-line options (do redsn0w -h to show all the available options).
Download Redsn0w 0.9.9b4 for Mac OS X
Download Redsn0w 0.9.9b4 for Windows