iPhone Dev Team has released Redsn0w 0.9.6 B3. Previously, redsn0w 0.9.6 Beta 2 enabled users to jailbreak iOS 4.1 as well as to jailbreak iOS 4.2.1 GM on iPad, iPhone and iPod Touch.

Unfortunately though, Cydia is not iOS 4.2.x compatible so when you download redsn0w 0.9.6 Beta 3, you can manually install packages into your idevice without needing Cydia. According to iPhone Dev Team:

We’ve made some updates to redsn0w to make it easier for jailbreak developers (and tinkerers) to get their programs ready for 4.2.1.  As noted in Update #2 above, the public version of Cydia (and MobileSubstrate too!) is not 4.2.1-compatible.  redsn0w will now let you install your own custom bundles independent of Cydia (the bundle can actually be Cydia if you’ve compiled it on your own).  These bundles can be up to 15MB in size, and should be in the form of a gzip-compressed tar file.

This release is strictly for jailbreak app developers to test their apps for iOS 4.2.1 GM but you can get a ride of it anyway.

Download Redsn0w 0.9.6 Beta 3 [Windows | Mac OS X]