Iphone 4 is acting glitchy.Should I update it?

I don't think having a slight outdated OS or Jailbroken device would cause those glitches to occur. On my iPhone 4 it once acted funny in a different way by not responding to my finger taps correctly. Try this, it helped me:

1. Hold the sleep/wake button on top and the home button at the same time. When the "slide to power off" slider appears keep holding the two buttons.
2. When it appears to be off keep holding the two buttons still.
3. Finally, when the boot apple logo appears you can release the two buttons.

This isn't a jailbreak technique that turns the phone into DFU or Recovery Mode. It's like a soft reboot that clears any lingering data on its RAM that might be causing your problems.