Seems like Dev Team has reached a little close to this untethered iOS solution mystery. The iPhone Dev Team has successfully ported Monte method back to iOS 4.1 kernel (SHSH blobs) to do an untethered iOs 4.2.1 jailbreak on iOS 4.2.1 without having iOS 4.2b3 hashes saved. It is expected that the next update of Redsn0w 0.9.7 will be able to do an untethered iOS 4.2.1 jailbreak on S5L8930-based iDevices like iPod Touch, iPhone 4 and iPad.
The already present Monte jailbreak technique requires you to have iOS 4.2 beta 3 SHSH blobs saved on Cydia. As iOS 4.2 beta 3 was only for those enrolled in the developer contract with Apple so many people went on pirating the iOS version and other simply have no access on it.
It is also confirmed that the Dev Team is working to port Monte Technique to iOS 4.3 which is the next high demand by the jailbreak lovers.
Redsn0w 0.9.7 is currently only for the Mac users and Windows users are anxious to have it. In fact there is a Windows version Redsn0w 0.9.7b6 but has not been released due to very slow performance.
For now you can download Redns0w 0.9.7 for Mac OS and use the HOW TO GUIDE TO UNTETHERED IOS 4.2.1 jailbreak on iPhone 4, iPod touch or iPad. Remember if you reply on the Ultra sn0w unlock then stay away from the betas of Redns0w.
On the other hand Greenpois0n rc5 untethered iOS 4.2.1 jailbreak solution is going to be released soon without any SHSH blobs saved.