Let's assume you have a jailbroken iPad running iOS 3.2.2. You used greenpois0n to jailbreak your iOS 3.2.2 and you installed OpenSSH to transfer apps via FTP. Here is what you need to do to upgrade to iOS 4.2.1 and keep everything like before.

• Save your SHSH Blobs if you haven't done already, use FirmwareUmbrella
• Run iTunes and search for the Update. It will find iOS 4.2.1
• Let iTunes install iOS 4.2.1
• Jailbreak your new upgraded iPad with Greenpois0n rc5 b2 for Windows, read the readme (Windows 7 will install an Apple driver during the process, nothing to be scared about)
• After Jailbreak run new created "Loader" to install Cydia (it will reboot and do some stuff)
• In Cydia click Options to remove Loader app and finally run OpenSSH installation to enable access to your iPad via FTP again
• Save your SHSH Blobs again with FirmwareUmbrella (just in case, you never know)

That's it. All your apps are still there and you can enjoy the latest features of the new iOS 4.2.1 like multitasking.