Dev Team has announced that Greenpois0n will be updated within the next few days to allow for 4.2.1 to be Jailbroken. As of right now, the Jailbreak will be tethered for all 4th gen based devices (iPhone3GS w/ new bootrom, iPhone4, iPad, iPodTouch3&4) but Comex is hard at work creating a userland exploit to untether 4.2.1. Word is that this untethering will require 4.1 SHSH Blobs. If you have not saved your blobs yet, even if you are not currently Jailbroken and/or not currently using iOS 4.1, you can go ahead and use TinyUmbrella to save them. However, since 4.2.1 was just released, Apple will stop signing 4.1 SHSH blobs very soon (any minute really) and once that happens, you are out of luck!
Next are the owners of all the more recent devices. 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.)
Also, if you plan on unlocking your iPhone or use unlock currently, please hold off updating to 4.2.1 until those tools are updated!