Members of Chronic Dev Team has finally announced the release of the long awaited GreenPois0n RC5. This tool brings untethered iOS 4.2.1 jailbreak for all iOS devices. Besides you do not need to have '4.2b3' SHSH blobs saved in Cydia, unlike the Redsn0w 0.9.7. Keep in mind, the software is only available for Mac OS X. A Windows version will be coming very soon.
Follow the below guide for step by step instructions to convert your tethered jailbreak to untethered jailbreak on iOS 4.2.1:
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