The iPhone Dev Team has released new information regarding iOS 4.2.1 jailbreak and unlock situation, which is as follows:
With Turkey Day a few days off, today Apple publicly released FW version 4.2.1. As always, ultrasn0w unlockers please stay far far away from this official firmware (and all official firmware). Wait for the ability to create custom 4.2.1. IPSWs that don’t update your baseband! If you’re not an unlocker, read on!
The best news of all is for owners of iPhone3G, older iPhone3GS, and non-MC iPod touch 2G. Due to a combination of our original pwnage2 exploit, the arm7_go exploit, 24kpwn, and limera1n, your device is “just as jailbreakable as ever.” You reap the full benefit of an untethered 4.2.1 jailbreak.
Next are the owners of all the more recent devices. The good news there is that due to geohot’s limera1n exploit, all recent devices can be jailbroken (this will be true until Apple released new hardware that fixes geohot’s limerain exploit in the bootrom). The bad news is that right now, the 4.2.1 jailbreak is *tethered* on all of these recent devices. A tethered jailbreak means that each time your device loses battery power or needs to be rebooted, you must attach it to a PC or Mac to boot into the jailbroken state. @comex is working hard on a method that may untether the 4.2.1 jailbreak, but it will require you to have your 4.1 SHSH blobs in order to use it. No word on how much more effort it will take though (please don’t bug @comex about it!). (We also have an alternative method that may work, but @comex’s method is much more elegant.)