redsn0w 0.9.6 BETA has been released by iPhone Dev Team to Jailbreak iOS 4.1 / 4.0 running on iPhone 3G and iPod Touch 2G using the same pwnage2 DFU-mode exploit and not the SHAtter exploit. Currently, redsn0w 0.9.6 BETA is only available to Mac users and windows version is reported to be released soon. But Windows users may use Sn0wbreeze 2.0 (scheduled to arrive on September 23, 2010) to jailbreak iOS 4.1, 4.0.1, 4.0 and iOS 3.1.x. Head over here to know which models are supported by upcoming Sn0wbreeze V2.0 Jailbreak.

Follow the simple guide below to jailbreak iPhone 3G and iPod Touch 2G running iOS 4.1 or iOS 4.0 on Mac. Steps are almost identical to jailbreak iOS 4.1 Beta 1 firmware.
Pre-requisites:
- An iPhone 3G or iPod Touch 2G on iOS 4.1 or iOS 4.0
- iTunes 10 installed on your Mac
- Save iOS 4.0 or iOS 4.1 on your desktop
- Redsn0w 0.9.6 BETA for Mac [Download link]
How to Jailbreak iOS 4.1 / 4.0 with Redsn0w 0.9.6
Step 1: Connect the iPod Touch or iPhone to your Mac using the USB cable.
Step 2: Run Redsn0w and click Browse. Select the Firmware 4.0 or iOS 4.1 from the desktop of your computer and then click Next to continue.
Step 3: You will now have a new screen where you can select packages to install. Select Cydia and if we wanted to, also check to enable multitasking. You can also change the background to the springboard.
Step 4: You will be prompted to put the iPod Touch in DFU mode. To do so: Press the Home and Power together for exactly 10 seconds then release the power button while continuing to press home only until a screen will appear all white. Another automated process will start to quickly run the jailbreak.
Step 5: After Cydia restarts, its real logo now appears, and the standard sources should be ready to use.
Voila! You have successfully jailbroken iOS 4.1 / 4.0 firmware on iPhone 3G and iPod Touch 2G. After upgrading and later jailbreaking with redsn0w 0.9.6b1, you might face incompatibility issues with your favorite iPhone apps forcing you to return to older iOS firmware. If for any reason, you upgraded it to iOS 4.0 or iOS 4.1 and would go back to 3.1.3, 4.0, then follow the steps below (for Windows and Mac users).
- How to Downgrade iOS 4.0 to 3.1.3 iPhone Firmware
- How to Downgrade iOS 4.2 to iOS 4.1 iPhone Firmware
- How to Downgrade iOS 4.1 to iOS 4.0 iPhone Firmware
- How to Downgrade iTunes 10 to iTunes 9.2.1
You may also like to check out more on:
- How to Jailbreak iPhone 3G and iPod Touch 2G on iOS 4.0.2
- List of iPhone 4, iOS 4.0 / 4.1 and iPad Jailbreak Compatible Cydia Apps
- Jailbreak iPhone 4, 3GS, 3G iOS 4 / 4.0.1, iPod Touch, iPad 3.2.1 with JailbreakMe 2.0 star
- Carrier Unlock iOS 4.0.1 iPhone 4, iPhone 3GS, iPhone 3G with Ultrasn0w 1.1-1
- How to Unlock 05.12.01, 04.26.08 to 05.13.04 Baseband on iPhone 3GS/iOS 4 with ultrasn0w 0.93
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[Update 1]: Musclenerd is confirming that Redsn0w 0.9.6 BETA can be used to jailbreak iOS 4.2 Beta.

He tweeted - “Since some will try it anyway: this redsn0w will also JB 4.2beta1 by pointing it at the 4.1 ipsw, but it’s *very* broken (flickers, etc)”
[Update 2]: If your iPhone 3G is already running Ultrasn0w carrier unlock, stay away from Redsn0w as it updates your baseband to the latest version, making it impossible (for now) to unlock.
