iPhone Dev Team have released an updated version of redsn0w 0.9.6b4 for Windows and Mac OS which allows you to jailbreak final version of iOS 4.2.1 running on iPhone, iPod touch and iPad devices. This is currently a “tethered” jailbreak. In other words, once you jailbreak using the current method, if you ever need to reboot your iPad, fourth-gen and third-gen iPod touch, iPhone 3GS (later models) or iPhone 4, you must have the device connected to your computer and use redsn0w to do the reboot, otherwise the phone simply won’t boot up.
The good news there is that due to geohot’s limera1n exploit, all recent devices can be jailbroken (this will be true until Apple released new hardware that fixes geohot’s limerain exploit in the bootrom). The bad news is that right now, the 4.2.1 jailbreak is *tethered* on all of these recent devices. A tethered jailbreak means that each time your device loses battery power or needs to be rebooted, you must attach it to a PC or Mac to boot into the jailbroken state. @comex is working hard on a method that may untether the 4.2.1 jailbreak, but it will require you to have your 4.1 SHSH blobs in order to use it. No word on how much more effort it will take though (please don’t bug @comex about it!). (We also have an alternative method that may work, but @comex’s method is much more elegant.)
Here is the Guide How to Jailbreak iOS 4.2.1 with RedSn0w 0.9.6b4
Download Redsn0w 0.9.6B4 for Windows.
Download Redsn0w 0.9.6B4 for Mac OS X.









I will wait. They will eventually release an untethered version.