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I'm following the instructions listed here http://www.geohot.us/2010/11/how-to-jailbreak-ios-421-iphone-4-3gs.html

and im wondering, when i "restore" to 4.2.1, will that wipe my phone of everything? I'm doing this so i can eventually do the unthethered jb

Yes it might because iPhone dev team has already mentioned that it is a beta version not the full version, well it might have some bugs and crashes. So I would suggest you to first back up your important data than go for it.
 
I'm actually talking about the thethered version for now, when i restore to my ipsw it metions it will erase and restore everything, im wondering what do i have to manually back up?
 
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