The Chronic Dev-Team has finally released the new version of Greenpois0n, which features a full untethered jailbreak for iOS 4.2.1. No SHSH blobs needed. The exploit used has already been patched in iOS 4.3, so it not work on future iOS 4.3.
You can jailbreak
There is only Mac OS X version available. Chronic Dev-Team will release Windows and probably Linux version soon.
Unlockers: do not update to stock iOS 4.2.1. You should keep your baseband version. Wait for new version of PwnageTool.