Though this isn't the official untethered jailbreaking solution for iOS 4.2.1, the iPhone Dev Team has produced a short demo video showing off a workaround method for getting it done now.
Hack-master comex is still working on the permanent untethered jailbreak, but if you've been following the jailbreaking community and happen to have saved SHSH blobs from your iOS device, your device could be jailbroken today.
A more efficient iOS 4.2.1 jailbreak should be just around the corner, so stay tuned. For more information about jailbreaking your iOS device, follow the iPhone Dev Team Blog. Are you going to jailbreak your iOS device? Let me know in the comments!