Last night the Chronic Dev Team released a version of greenpois0n which allows you to jailbreak iOS devices running 4.2.1. The update also allows you to reboot without having to re-jailbreak. The update is only available for the Mac, and be sure you read the documentation before jailbreaking! Be aware that as of this writing the greenpois0n site is down, so you can't download the app. We'll update this post when it returns.
Update: As of 2/5/11 the site appears to be back up.