That's what I did, but then I always got the "eligible" error.
If you did not save the SHSH for older firmware, then the only thing you can install is the latest firmware, presently 4.3.3.
If you are asking "What is SHSH?" then it's too late to save it. For future reference, google "tinyumbrella" and download it, and get in the habit of saving SHSH every time a new firmware is released.
In any case, I'm not sure there is any advantage to installing 4.2.1, as I believe 4.3.3 is fully jailbreakable on all models of iPod touch.