Comex of Spirit and JailbreakMe fame has confirmed that a more efficient userland-based untethered jailbreak method for iOS 4.2.1 will be released before Christmas 2010. This confirmation in fact came before MuscleNerd got a backup method to make jailbreak untethered on iOS 4.2.1.
iCykey: @comex I want a 4.2.1 untethered jailbreak for christmas 😛
Comex: @iCykey you’ll get it.
More info on this as it comes, stay tuned for that !