According to a recent tweet from P0sixNinja, the iPhone hacker behind GreenPois0n, an updated version of the jailbreak will be released as soon as he finishes adding the new sandbox patches.
There are good reasons to think that this jailbreak for iOS 4.2.1 will be a tethered jailbreak, thus requiring you to plug your iPhone in and boot it with GreenPois0n every time you shut down your iPhone…
GreenPois0n was first released a few months ago to jailbreak iPhone iOS 4.1. It is a quick and easy jailbreak that require very little action. While there are no official ETA, we all hope a GreenPois0n jailbreak for 4.2.1 will be available sooner rather than later.
In the meanwhile, the Dev Team is still working on an untethered jailbreak for iOS 4.2.1 with RedSn0w, which is still in beta.