Here is the long awaited jailbreak (greenpoison / greenpois0n)
http://iblaster.xtreemhost.com
or
http://greenp0ison.Co.CC
or
http://iblaster.zxq.net/greenp0ison/
it uses shatter exploit and permanently jailbreaks your iPhone / iPod touch for future releases
steps:
- Download the zip file
- Extract it
- ios 4.1 should be installed on your device
- connect the device in DFU mode
- and let the Greenp0ison do the work
Happy jailbreaking