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The Chronic Dev-Team has announced an untether for the iOS 4.2.1 jailbreak.
The untether is demoed in the video below. It's a result of a collaboration between @0naj, @p0sixninja, and @pod2g. P0sixninja has previously said it will not require iOS 4.2b3 SHSH blobs.
Pod2g notes that a small bug remains where the wifi icon doesn't show up. Once fixed they will package the untether for release.