Now that redsn0w has been updated to jailbreak iOS 4.2.1 you may be wondering what's involved in actually jailbreaking your iPhone. Here are some tips and instructions to help. First of all, if you have an unlocked iPhone don't update your device to the official iOS 4.2.1 or use the redsn0w 0.9.6b4 jailbreak. You will lose your unlock.
UPDATE: Comex has released an easier method for newer 4.x firmwares. Click here for instructions on how to use JailbreakMe 3.0 to jailbreak your device.
1. To see if you can jailbreak untethered find out if your iPhone is an MC model. All iPhone 4 models currently require a tethered jailbreak. If you don't want to have to boot your iPhone tethered every time you turn it off, then wait for Dev-Team to develop an untethered solution.
2. Ready to jailbreak? Download the redsn0w 0.9.6b4 software from iPhone Dev-Team. Install and run redsn0w.
3. Use redsn0w to select the IPSW file matching the current iOS version installed on your iPhone. You may want to make a backup of this file before jailbreaking, otherwise an official version can be downloaded later if necessary. These firmware files are stored in a directory on your computer. If you can't see the files in Windows make sure Windows is set to show hidden files. Here are example files:
4. Redsn0w will verify the firmware file and prepare jailbreak data.
5. Select the check box next to Install Cydia and click Next.
6. Make sure your iPhone is plugged into the computer and TURNED OFF then click Next.
7. Follow the on-screen instructions carefully to put your device into DFU mode. When the iPhone enters DFU mode redsn0w will proceed to install jailbroken firmware.
8. Redsn0w will notify you when your jailbreak is complete. If you need the tethered jailbreak on your model iPhone, make sure to immediately boot tethered before using your device, otherwise Cydia and jailbreak apps will not work.