DevTeam hacker MuscleNerd tweeted that they after releasing redsn0w jailbreak for 4.2 the team can start working on iPhone unlock. Users can expect the unlock for the iPhone 3G and iPhone 3GS this week. The iPhone 4 unlock will take more time and no concrete info is available about that yet.
The ultrasn0w unlock will be released for iOS 4.1 firmware. So is you need unlock, do not update to iOS 4.2.1.