The developers at FireCore have released Seas0nPass
, a tethered jailbreak for the second-generation Apple TV running 4.1.1 (iOS 4.2.1). Like PwnageTool or Sn0wBreeze, Seas0nPass creates a custom IPSW that gets loaded on your device. The tool is extremely simple and easy to use, automating all the steps except actually entering DFU mode (like most JB tools, it will guide you through that as well). It will even download the stock IPSW from the internet for you.
Seas0nPass is free and open source: you can download the source