The following guide will help you jailbreak Apple TV 2G, untethered on iOS 4.2.1 using GreenPois0n RC6.
Step 1: Download GreenPois0n from the link given below. Run it, and click “Yes” when it prompts for jailbreaking Apple TV.
Step 2: Connect Apple TV 2G to your computer using micro-USB cable and click on “Prepare to Jailbreak (DFU)” as seen in the screenshot below.
Step 3: Now follow the following onscreen instructions to enter DFU mode:
Plug Apple TV in to USB (7 seconds)
Plug in power adapter (3 seconds)
Press and hold MENU and PLAY/PAUSE (7 seconds)
Release both buttons
Step 4: GreenPois0n will now start “Jailbreaking” Apple TV 2G untethered on 4.2.1. The process will take around 3 to 4 minutes to complete.
Step 5: Your Apple TV should now be successfully jailbroken untethered on iOS 4.2.1. Once done, unplug it from your computer and connect it to your TV again. Navigate to “greenpois0n” menu and select “Inject Software” option to install Cydia package.
Once you are done with the jailbreak, you can install the following apps on your jailbroken 2nd-gen Apple TV: