Chronic Dev Team finally release the latest iOS 4.2.1 perfect jailbreak tools – Greenpois0n RC5. You may download the iOS 4.2.1 at here and Greenpois0n tools at greenpois0n.com
Please view the following video in youtube on how to jailbreak your iphone with the latest GreenPoison.
* Please be sure to backup everything in your phone before proceed for the update of iOS as well as jailbreak your iphone.
For more regarding step by step detail on how to jailbreak your iPhone iOS 4.2.1 with GreenPois0n, you may refer here