iPhone hacker Comex has announced through Twitter that there will be an untethered jailbreak for 4.2.1 before Christmas. These were all the details he gave but as he has already created JailbreakMe and Spirit jailbreaks he is a trusted source.
In addition MuscleNerd, of the iPhone Dev Team, has announced that he has a backup way to untether the 4.2.1 jailbreak. He proves this in the video here:
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