Yes, Apple is releasing it today. No you should not update to it.

For those that did not read that, DO NOT UPDATE TO 4.2.  Ok now that you’ve read it, wait for the jailbreak to be officially tested and released. Further, remember that jailbreak on 4.2 is likely tethered on newer devices, which means you have to rerun it every time you reboot your device.  This was covered here already. Dev team also covered this in more detail here.

4.2 is out. Most of you should hold off on the update for now. If you have some bug you are hoping is fixed by 4.2, it’s not.

Worse yet, while limera1n and greenpois0n allow for 4.2 to be jailbroken, in most cases this is a tethered jailbreak. That means if you have to reboot your device, it shows a “connect to itunes” logo until you run the jailbreak software again.  I suggest not updating until something changes and your device is in the untethered jailbreak list (once tools are out):

iphone3g - will run 4.2 untethered. Redsn0w or such will be updated
iphone 3gs – old bootrom will run 4.2 untethered if done via pwnage tool while updating from 4.1. Otherwise it will be tethered.
iPhone 4 – tethered
iPod 2g – 4.2 untethered.
ipod 3g and newer – tethered
iPad – tethered.

Tethered jailbreak isn’t that bad for ipads and ipods. But if something happens and your iphone reboots while you’re away from your computer, you cant use the device until you get home and run something on your computer again.  The community is working on a solution to this to either make the jailbreak untethered or at least semi-tethered. Semi-tethered means the device will at least reboot, but unjailbroken while on the road until you return to your computer.