First POST!!
iPhone un-tethered Jailbreak is out now! (the preferable one)
If you
unlock your phone (e.g. it's an AT&T phone only that you unlock to use on Vodafone, etc..) use
http://blog.iphone-dev.org/ with a Mac to create a custom IPSW that "preserve baseband". Use the custom IPSW to restore your iPhone to 4.2.1.
If you don't need the unlock, just update your phone to 4.2.1 using iTunes, reboot, and download/run
http://greenpois0n.com/ for Windows/Mac or Linux.
I've used Greenpois0n on my own iPhone4 and it worked flawlessly/quickly
If you have any questions let me know (in the forum), please give karma, my reading access is in the shitter