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As expected, iPhone Dev team has just released a new version of Redsn0w (Redsn0w 0.9.7b1) that implements the “backup plan” for iOS 4.2.1 untethered jailbreak.
Redsn0w 0.9.7b1 can be used to (untethered) jailbreak iPhone 4, iPad and iPod touch 4G on iOS 4.2.1. Please note that Redsn0w 0.9.7b1 is meant only for beta testers and not for the general public as there are still some known issues that need to be addressed.