Just one day after Apple's release of the iOS 4.2 firmware update, iPhone Dev-Team has made public the first updated jailbreaking tool for Mac OS X and Windows. Redsn0w version 0.9.6b4 can be used immediately for those who are not concerned about using the ultrasn0w unlock. iPhone 3G and older iPhone 3GS users will be happy to know that the jailbreak is untethered.
For newer iPhone 3GS and iPhone 4 users, this version currently requires a computer to boot into the jailbroken state. The iPhone Dev-Team is working with @comex on a fix that would untether the iPhone 4 jailbreak once and for all. Unlockers can expect a new version of ultrasn0w for the iPhone 3G and iPhone 3GS as early as next week.
First and foremost, never update using an official firmware file via iTunes if you're interested in unlocking. Secondly, make sure to save your SHSH blobs to preserve future jailbreak and unlock options. Dev-Team would not say how long it might take to untether the iPhone 4 iOS 4.2.1 jailbreak, but work is underway.
All recent iOS devices can be jailbroken thanks to a combination of past exploits including pwnage2, arm7_go, 24kpwn, and geohot's limera1n. The current jailbreak solution will work until Apple updates the iPhone hardware. Make sure you get the official, free redsn0w for your platform directly from iPhone Dev-Team. If you can't stand the thought of a tethered jailbreak, be patient. We'll break the news as soon as Dev-Team releases the latest tools.