The iPhone Dev-Team has updated RedSn0w to easily boot devices that are running a tethered jailbreak. Now, we can easily boot a device that has a tethered jailbreak. Here is a tutorial on How to : Boot Your Tethered iOS 4.2.1 Jailbroken iPhone (Mac).

iPhone Dev team : We’ve updated redsn0w to include “one-click” support for those of you running the tethered 4.2.1 jailbreak. Using command-line arguments, you can now bypass the screens you’d normally see as you use redsn0w to “Just boot tethered for now”.

The available command line arguments are:
-j to ask redsn0w to “Just boot now tethered for now”
-i to specify your reference IPSW
-o for old-bootrom iPod touch 2G and iPhone 3GS
-b to specify your own boot logo png

For example, redsn0w for Mac to do a tethered boot of an iPod touch 4G jailbroken at 4.2.1:

open ~/Desktop/redsn0w.app —args -j \ ~/Desktop/iPod4,1_4.2.1_8C148_Restore.ipsw

This assumes both redsn0w and the IPSW are on your OS X desktop, so modify as necessary! Included in the zip is an example script file that you can double click on to launch redsn0w like this (the Windows example assumes everything is in C:\). (Mac users: please remember to change the permissions of your custom *.command files to allow execution.)

This should help ease the pain of the tethered jailbreak until @comex comes up with a 4.2.1 untether (or for those of you with legit access to the 4.2b3 IPSW, until the “Jailbreak Monte” untether is out of beta)!

PLEASE UPGRADE TO iTunes 10.1 FOR BEST RESULTS
WINDOWS 7 USERS SHOULD RUN redsn0w IN “XP COMPATIBILITY” MODE
Make sure you’re using a USB 2.0 port

You can download RedSn0w 0.9.6rc7 from here:
Mac
Windows