MuscleNerd from the iPhone Dev Team has confirmed via Twitter that he has managed to get an untethered jailbreak working for iOS 4.2.1 devices. Currently the only jailbreak available for iOS 4.2.1 involves tethering your device to a Mac or PC in the event that your device needs a reboot. This could be problematic if you are out and are away from your notebook or desktop machine.
ipt4g 4.2.1 untethered JB w/4.2b3 kernel ... Wastes no exploits, but upcoming @comex JB maybe better
In order to use this method, you must have had your SHSH blobs saved with Cydia or TinyUmbrella, as the exploit uses iOS 4.2 beta 3. No news on the release date of this yet, or Comex’s upcoming jailbreak, but we will let you know as soon as we find out.
The jailbreak will work with all iOS devices, the question is, do you want your 4.2.1 jailbreak right... or simply right now? Video after the break.