It looks like everyone seems to have missed this! But if this statement from Comex is anything to go by, the untethered jailbreak for iOS 4.2.1 might be as simple as installing a package from Cydia over your existing Redsn0w tethered jailbreak – Yes, you don’t need to restore or re-jailbreak your device.
Comex: it’s probably going to be a Cydia package. if I can get it to work.
Comex: @GP34MVP that everyone’s wrong including @MuscleNerd :p
Probably referring to this statement from MuscleNerd of the iPhone Dev-Team.
It is important to note that the iPhone Dev-Team already has a backup plan ready, but that will require iOS 4.2b3 SHSH blobs for untethered jailbreak. Comex is said to have a more efficient untethered jailbreak method for iOS 4.2.1. This untethered solution will almost certainly be applicable to all current iOS 4.2.1 devices, including the new A4-based ones which includes iPhone 4, iPad, Apple TV 2G and iPod touch 4G.
While the actual details about the state of the jailbreak are still unknown, but what we do know is that it is probably not coming by Christmas, as been confirmed yesterday by Comex himself.
More info as it comes, stay tuned !