Moments ago, we posted that Limera1n was released to jailbreak all iOS 4.1
devices forever. We promised with how-to guides and here we go, you can now use the step by step guide below to jailbreak iPhone 4 and iPhone 3GS using Limera1n on Windows only.
Here's the instructions to jailbreak iPhone 4, 3GS on iOS 4.1 using Limera1n, PLEASE read the important notes at the end of the post:

STEP 1: Download Limera1n for Windows from [You must be registered and logged in to see this link.].

STEP 2: Connect your iPhone to your PC via USB then launch Limera1n and hit “make it ra1n”
STEP 3: You will have to get your device into DFU mode by following the steps on the screen shown by Limera1n.

• You iPhone will now be placed in recovery mode.
  

• Press both the power and the home buttons.
  

• When Limera1n asks you to, release the power button.
  

• Your phone will now be in DFU mode
  

STEP 4: Now, Limera1n app should be shown on your iPhone's home screen. Limera1n will pwn your device forever now.

STEP 5: The jailbreak should be done now. Tap on the limera1n icon on your device and install Cydia.

IMPORTANT:
You have to keep some points in your mind, first, Limera1n will not unlock your device (i.e. you will lose unlock if you upgraded to iOS 4.1 and used limera1n).

Second, Limera1n is not working with old bootrom devices and it doesn't support iOS 4.2 beta, Geohot is fixing the issues right now. Stay tuned.

Limera1n would mess up GreenPois0n jailbreak release as the teams don't want to give Apple two exploits. They would better save one of them to 5th-generation devices.