Anyone else with iPhone 4 and iOS 4.2.1, jailbroken with Redsn0w, suffering from boot issue when installed with Mobile Substrate version 0.9.3367-1? Apparently, with Mobile Substrate installed, my iPhone 4 won't even boot. All i see on the iPhone is the Apple logo. To boot up the iPhone, i have to use Redsn0w and perform a tethered boot.

Did you properly read the release notes for redsn0w jailbreak of 4.2.1? This is a limitation of the way the current jailbreak is designed.

Dev-Team Blog - Thanksgiving with Apple

Update #2: The notion of a “tethered” jailbreak is pretty new to many people, so here’s a quick rundown on what to expect:

1. If you’re on an iPhone3G, old-bootrom iPhone3GS, or non-MC ipt2g, life is easy. redsn0w installed an untethered jailbreak and so nothing below applies.
2. “Tethered” does not mean you cannot boot at all without PC/Mac assistance. If you have not installed any tweaks that hook into important programs like SpringBoard or CommCenter, your device will actually boot. However, jailbreak programs like Cydia won’t work (and Cydia may still have a white icon). Also, certain built-in apps that had to be moved by Cydia will fail (Safari being the most noticeable example).
3. If you’ve installed MobileSubstrate tweaks that hook into SpringBoard or other important programs, your boot will actually fail (you’ll get stuck at the Apple logo). You need to use redsn0w to “Just boot tethered right now”.

If you have a 4.1 SHSH, soon the jb-monte technique will offer an untethered jailbreak (this will be integrated into redsn0w). Also the chronic dev team have identified a new kernel exploit that that allows 4.2.1 to be untethered, there is no ETA on when that will be released.

@Olethros: Thanks for the response!