Apple today released iOS 4.2 GM for developers and guess what? iOS 4.2 is vulnerable to Redsn0w 0.9.6 b2 released by iPhone dev team. You can jailbreak your iPhone 3G, iPhone 3GS, iPhone 4, iPod Touch 2G, iPod Touch 3G, iPod Touch 4G and iPad running on iOS 4.2. Needless to mention but if you use Ultrasn0w to unlock your phone should stay away from Apple Stock Firmware update and Redsn0w.
Current version of ultrasn0w unlock works for all firmware from OS 3.0 up to iOS 4.01, for more information check our previous guide to Unlock Baseband 04.26.08, 05.11.07, 05.12.01 and 5.13.04 With Ultrasn0w.
NOTE : Don’t install cydia because it’s not compatible with iOS 4.2, if you are not a developer than stay away.
Update by iPhone Dev Team :
Today Apple released to developers the GM seed for 4.2. Tinkerers will find that yesterday’s redsn0w jailbreaks today’s 4.2 GM seed, simply by pointing redsn0w at the 4.1 IPSW (rather than the 4.2 one). Right now it mostly only makes sense for JB app developers to do that because many apps (including Cydia itself) need to be updated for 4.2. However, if all you want to do is enable afc2 (to use iFunBox or other file browsers), or to tweak settings like Battery % and Homescreen wallpapers, then go for it (if you have valid paid access to the GM seed). Be sure to uncheck the Cydia box, though!