Follow the below guide for step by step instructions to convert your tethered jailbreak to untethered jailbreak on iOS 4.2.1:
STEP 1: Your device must be on iOS 4.2.1, then download GreenPois0n RC5 for Mac OS X from here. [Mirror 1, Mirror 2]
STEP 2: Launch GreenPois0n RC5 then connect your iPhone into your Mac via USB and click on Jailbreak as shown below:
STEP 3: Follow the instructions shown on the screen to enter DFU mode:
STEP 4: Once jailbroken, you'll get Cydia installed on your iOS device and you won't need to use Just tethered boot right now option anymore.
Source: Covering Web
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