Following the release of untethered iOS 4.3.2 jailbreak two weeks ago for GSM-based iPhone 3GS and 4, iPad 1 and third- and fourth-generation iPod touch that run iOS 4.3.2, a hacker that goes by the nickname "iH8Sn0w" has updated the Sn0wbreeze tool for Windows to version 2.6.1 with support for Verizon iPhones running iOS 4.2.7. This is an untethered jailbreak, meaning you aren't required to connect your device to a computer each time it's restarted (you can imagine how inconvenient that is).
The updated Sn0wbreeze tool works only on Windows and it requires a copy of iOS 4.2.7 firmware. A handy jailbreaking guide can be found here, courtesy of RedmondPie. As for the firmware, you can either google it or download a useful utility called ipswDownloader that takes the pain out of finding and downloading iOS firmware releases for iPhones, iPods, iPads and even Apple TVs. It supports iOS from version 1.0.1 to CDMA iPhone 4 firmwares.