This is a horrible help thread. People need to be clear with their instructions.
If people are commenting out the gs.apple.com entry, it just means they aren't forcing a particular IP resolution for gs.apple.com. Therefore, if you don't have it in your hosts file, then it's just as if you had it in there and commented it out.
If it's not working for you (and your hosts file either doesn't have an entry or it's commented out with #), then there's some other problem (I am trying to track it down).
Edit: Here's a procedure that worked for me:
greenpois0n mirrors:
http://iphonejailbreaks.org/mirror-download-links-for-greenpois0n-rc5-to-jailbreak-ios-4-2-1/
Supposedly fixed version:
http://46.4.219.216/dl/greenpois0n-osx_rc5_2.zip
1) Edit /etc/hosts (must be root or use sudo) and ADD the following to the end of the file: 74.208.10.249 gs.apple.com
2) Save and close the file.
3) Type (in terminal): dscacheutil -flushcache [this ensures that all aspects of the OS pay attention to your /etc/hosts file changes. Rebooting will also accomplish this step and waste your time.]
4) In terminal, type: cd <path to greenpois0n>/Contents/MacOS/
For example, I have mine stored in the /Applications folder with all the rest of OS X's apps. So I would type: cd /Applications/greenpois0n.app/Contents/MacOS/
If you put it on the desktop, type: cd ~/Desktop/greenpois0n.app/Contents/MacOS/
5) Type 'ls' and read the stuff that's there. For example, you might have: greenpois0n iBSS.n90ap kernelcache.release.n90
6) Type 'rm iBSS.n90ap' in terminal. Type 'rm kernelcache.release.n90' in terminal. Remove all files there EXCEPT greenpois0n. You may find the tab key will help you autocomplete names (e.g. type 'rm iBSS<tab>')
7) Plug in your phone and turn it off. Close iTunes.
8) With everything except greenpois0n gone, type: sudo ./greenpois0n
9) greenpois0n launches (the GUI). The terminal window will start spitting stuff out, too. Follow the GUI instructions (press the button...)
10) For me, it booted to the same "hanging" screen the first time around. I shut down the phone and that caused greenpois0n to crash. I relaunched using step (8) above and redid the process. It worked on the second try. Watch the terminal window because it spits out more data (it looked like the second try hung, too, until the phone dumped me straight to the kernel load screen and the screen was filled with text). Be patient at this point (greenpois0n reports it's done so you can close it).
You'll want to wait for this step in terminal:
Checking if kernelcache already exists
Fetching kernelcache.release.n90...
A progress bar will appear in greenpois0n. If you're here, you're set.
11) The first boot process on the phone takes a while. You will see some text, then you will see an animated Apple logo spin around to display the greenpois0n logo. Keep waiting. Sometimes a progress circle will appear superimposed over it. Keep waiting (I waited about 4 minutes). At some point it looks like it reboots itself (respring?). Eventually it dumps you to your iOS home screen.
12) Get a sandwich.
Notes: I started with a redsn0w tethered jailbreak experience on iPhone 4 (iOS 4.2.1; iOS 4.1 SHSH blobs already saved), so I did NOT need to restore in iTunes and start fresh. I haven't tested that this works without tethered boot (i.e. the greenpois0n hack works as advertised), but I'll just assume it does at this point (edit: rebooted the device and, sure enough, it's an untethered jailbreak).
Procedure performed under OS X 10.6.6. Your milage may vary with older OSes (I think dscacheutil was introduced in 10.5?)
Something to be aware of: When Apple releases a new iOS in the future, you may want to upgrade and lose your jailbreak (i.e. iOS 4.3 or 5.0). If you do that, you MAY need to comment out the changes you made to the /etc/hosts file so the new iOS is authenticated with Apple's servers since cydia's servers might not be updated immediately. To do that, change the following line in /etc/hosts:
74.208.10.249 gs.apple.com
to
# 74.208.10.249 gs.apple.com
Reboot or type: dscacheutil -flushcache
