Is jailbreaking illegal?? Of course not! It is fully legal to jailbreak your Apple device according to a US court. But Apple has a different set of opinion. Apple has released iOS 4.2.1 but it has included some obstacles with this version of for jailbreakers and unlockers. The company introduced a baseband necessity for iOS.
To be more precise, if you use TinyUmbrella or Saurik’s server to restore 4.2.1 on your iDevice, you will get in recovery mode resulting in TinyUmbrella unable to bring you back our of the recovery.
TheBigBoss: It seems that Apple has decided to put a baseband requirement on iOS. So at this point, if you are using Saurik’s server or tiny umbrella and trying to restore 4.2.1 on an iPhone 4, you will end up in recovery mode and tiny umbrella will not be able to pull you out of recovery. In this case, you will have to restore 4.1 again or you will have to restore 4.2.1 stock and be tether jailbroken. (Of course, I recommend 4.1 and not bothering with 4.2.1 at all). If you are an unlocker, this is a no brainier. Do not update to 4.2.1 even to test it at this point.
So it is much better to stay on iOS 4.1 and wait for time until we found its solution.