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The key information is that PwnageTool dosen’t have a release for 4.2.1 as of today (December 29th.). If you buy a AppleTV today you get iOS 4.2.1 on it.
Go here to funkyspacemonkey.com for the directions on how to make Pwonage work.
* Get the right ATV FW version here at iClairified
* PwnageTool: http://public.stuff.hu/pwnagetool/PwnageTool_4.1.2.dmg
* Tinyumbrella: http://cache.firmwareumbrella.com/downloads/TinyUmbrella-v4.21.02.pkg
* Tetheredboot: https://github.com/msftguy/syringe/downloads