The iPhone Dev Team has just released the beta release of the new version of Redsn0w 0.9.7b1 which untethers iOS 4.2.1 jailbreak so you don't need to plug in your iPhone every time you reboot it.
Update: here is the full guide showing you how to jailbreak you device using Redsn0w 0.9.7b1, Click Here.
Download Redsn0w 0.9.7b1 for Mac OS X
Download iOS 4.2.1 for iPhone, iPad and iPod touch
Download iTunes 10.1.1 for Windows / Mac OS X
UPDATE 1: [Video Guide] Redsn0w 0.9.7b4 has been released to Untethered Jailbreak Without the Need of ‘usbmuxd’ Process , check full details Click Here.