There is a whole lot of confusion floating around the jailbreak and iPhone community right now regarding the new iOS 4.2. A short answer on what’s going on is basically there is NO official working jailbreak as of right now, but that can be open for interpretation.
The big issue right now is that Cydia is broken on iOS 4.2.1. But there is an available patch that gets Cydia working on a jailbroken iPad running iOS 4.2. The best way to jailbreak your iPad 4.2 is with the PwnageTool bundle if you have a Mac. Otherwise the Dev Team released Redsn0w 0.9.6b3 yesterday.
All of these so far are either tethered or semi-tethered jailbreak, unless you have a iPhone 3G, iPod Touch 2G (non MC) or iPhone 3Gs with older bootrom. Those devices are untethered.
Now for the Cydia fix, our good friends at Redmondpie have a excellent guide for installing and patching Cydia on iOS 4.2.1 after a Redsn0w jailbreak.
Once we get all this sorted out and if any new developments or official jailbreaks are released, myself and the rest of the BlogsDNA team will have all the necessary guides and info for you to successfully jailbreak.
Update: Make sure you back up your iOS 4.1 SHSH blobs with tinyumbrella before you install iOS 4.2!