Apple has released iOS 4.2.1 for the new Apple TV which was previously running iOS 4.2. The new firmware is build number 8C154.
Strangely although the previous ipsw was labeled iOS 4.2 the Apple TV reported a lower firmware version for many. It's not clear if this update corrects the discrepancy and brings the version numbers back in line.
It's not known yet if the new firmware brings any additional features.
You can download the update here or by going to software update on your Apple TV.
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Apple has just released a minor iOS 4.2.1 software update for the Apple TV 2G. It addresses an issue that causes some high-definition TVs to incorrectly display at 480p as well as an issue that may cause a movie or TV show to be re-downloaded. The build which is marked as iOS 4.2.1 (8C154) is reported by Apple TV as software version 4.1.1. The previous Apple TV iOS 4.2 was Build 8C150 and it was reported on the device as 4.1. According to nitoTV, it appears that SettingsAboutViewController grabs the software version number from the Info.plist inside of AppleTV.app rather than [ATVVersionInfo currentOSVersion] which is why it listed 4.2.1 in 4.2 and 4.1.1 in 4.2.1. NitoTV also confirmed that tethered Jailbreak for 4.1.1 still works just fine.