Greenpois0n RC5 now allows you to jailbreak iOS 4.2.1 untethered on most devices including iPhone 4 and iPad. The best part? You won't need any SHSH blobs saved. redsn0w beta required you to have 4.2b3 blobs saved (and it was pretty unstable). Hopefully greenpois0n is going to be a much smoother experience for you guys. Hit the jump for a walkthrough on how to jailbreak iOS 4.2.1 with greenpois0n and for the answers to some commonly asked questions.
You'll need to be running iOS 4.2.1 in order for this version of greenpois0n to work (4.1.1 for AppleTV second generation users).
In short, most likely. If you're already stock and haven't been jailbroken, you're fine. Still back up your phone first in case anything goes wrong.
If you are currently jailbroken on 4.1, yes. Do a full stock restore to 4.2.1 and restore as a new iPhone. After jailbreaking, I still don't recommend restoring from a backup. Old jailbreak pieces can come with your backup and cause issues for you. Just my personal recommendation.
If you are currently tethered on 4.2.1 via redsn0w, you should be able to just run greepois0n right over your current jailbreak to untether. Some of the devs are saying if you have issues installing Cydia via greenpois0n after running it, simply run redsn0w again and let it re-install Cydia. Basically, as long as you aren't running a Monte version jailbreak on 4.2.1, you should be able to run greenpois0n to untether.
No. You'll have to wait a bit longer on a tested jailbreak for 4.3.
Note: Some users in the comments have been reporting sometimes the initializing error is a result of not holding the home button long enough when entering DFU mode. Even when the text is not greyed out anymore, continue holding the home button if you're getting the Initializing error even after trying Greenpois0n RC5 version 2.