iOS 4.2 is so close we can taste it. The Gold Master was today released to developers. This means the software is going through its final tests before becoming available to consumers, so we should be seeing it very soon.
Remember, if you chose to jailbreak iOS 4.1, you will want to hold off on the update until further notice. On the bright side, it should fix the alarm clock problem. If you do decide to hold off on the update, then you may want to check out some ways to make sure your alarm wakes you up in case your iPhone gets caught by the Daylight Savings Time Bug: Here