Apple released iOS 4.2.1 GM to developers a couple days ago, and this new build can already be jailbroken using RedSn0w, as confirmed by Redmond Pie.

Even though the jailbreak process of iOS 4.2.1 GM is successful, it won’t take you too far as Cydia doesn’t work properly with iOS 4.2.1 and will crash at launch. If you know your way around the iPhone files, you can however SSH into your iPhone to manually install jailbreak applications.

Installing and jailbreaking iOS 4.2.1 GM is fairly easy, but it’s worth noting you should stay away from it if you rely on an unlock for your iPhone. iOS 4.2.1 GM will update your baseband, and most likely make it impossible for you to unlock for a while.

This being said, here is how to jailbreak iOS 4.2.1 GM with RedSn0w

Simply download RedSn0w 0.9.6 beta 2 and follow our previous RedSn0w tutorial. The step by step instructions are exactly the same. As explained in this tutorial, you should point RedSn0w to iOS 4.1, and not to iOS 4.2.1 GM.

This should work for the iPhone 4, iPhone 3GS, 3G, iPad and iPod Touch.

If you dare giving this a try, please make sure to share your experience by leaving a comment below.