Yesterday, Apple team released the iOS 4.2.1 firmware update for iDevices, and now iPhone Dev team has rolled out Redsn0w 0.9.6b4 to jailbreak the latest firmware.
Redsn0w 0.9.6b4 is a tethered jailbreak for iOS 4.2.1, which helps jailbreak iPhone, iPod Touch and iPad. Comex is apparently working on a solution to provide untethered jailbreak facility for the Redsn0w tool users and it will hopefully be released soon.

If you’re an unlocker, do not update your device to iOS 4.2.1 as there is no unlock tool available on the Internet. Redsn0w 0.9.6b4 is based on Limera1n’s exploit, so there should not be any problem with the jailbreaking process. In case you don’t know how to jailbreak your devices with Redsn0w tool, please wait for the upcoming guides.
Download Redsn0w 0.9.6b4 for iOS 4.2.1 Jailbreak
[We've removed the downloadable links from our site due to policy violation issues. Sorry for the inconvenience.]
Update: Guide – Jailbreak iPhone 4 iOS 4.2.1 with Redsn0w 0.9.6b4
