Unfortunately though, Cydia is currently broken on iOS 4.2, but msft.guy has released a patched version of both Cydia and MobileSubstrate which you will have to install manually. You can download this patch from here.
To try out this bundle, simply download the latest version of PwnageTool bundle from here, and then follow the complete step by step instructions posted here for patching PwnageTool 4.0.1 so that it works with iOS 4.2 Beta 2.
NOTE: I haven’t tried this latest bundle, and cannot guarantee that it works. Proceed at your own risk only. We are not to be held responsible for any loss of data, or malfunctioning of your iPhone.