Redsn0w 0.9.6b4 Download Available Now
Redsn0w 0.9.6b4 has been released for download by the iPhone dev team, and it allows you to jailbreak iOS 4.2.1, but there’s a catch; not all hardware get an untethered jailbreak. Redsn0w 0.9.6b4 only supports the following devices for untethered jailbreaks: iPhone 3G, older iPhone 3GS, and older iPod touch 2G models. All other iOS devices will have to be plugged into your computer with redsn0w launched each time you reboot the device (or your battery dies). For this reason, I would recommend most people wait on trying to jailbreak iOS 4.2.1 until another untethered solution is available.
Download Redsn0w 0.9.6b4
You can grab the latest redsn0w release for Mac or Windows:
Note about unlocking iOS 4.2.1
If you plan on unlocking your iPhone, do not update to iOS 4.2.1 and do not use redsn0w for now because it will update your baseband. Unlockers should save SSH blobs from their current firmware (iOS 4.1 or earlier) and wait for a PwnageTool update so that you can upgrade to iOS 4.2.1 without updating the devices firmware. If you update to 4.2.1 you risk losing the ability to unlock your iPhone.
Update 2: redsn0w 0.9.6b6 download is now available and helps to resolve battery drain issues with unlocked iPhone 3GS and 3G models.
Update 3: Redsn0w 0.9.6rc8 is out.