This might be a stupid question, but is each new version of Redsn0w still capable of jailbreaking other/older versions? For example, if a guild says to use 0.9.6b4 to jailbreak 4.2.1, can I still use the newest version of Redsn0w to jailbreak it? Or say another person's iDevice that is 3.1.2? Or is each version of Redsn0w made specifically for one firmware jailbreak?

In other words, should I always have the newest version of Redsn0w or should I have a different version for each type of jailbreak? And (off topic) is the newest Redsn0w capable of untethered iTouch 4g JB (for a friend)?

No, each version of redsn0w is usually designed to support a specific range of iOS versions for example 0.9.4 can jailbreak any 3.1.x version
or 0.9.5 can jailbreak any 4.0.x version (3G only)

redsn0w - The iPhone Wiki explains clearly what iOS versions are supported

Thanks for clearing that up