PwnageTool has just been updated to 4.1.2 by the iPhone Dev Team. This new releases includes bug fixes involving Cydia as stated below:

[Update: Version 4.1.2 should fix any issues that OS X 10.5.x users were seeing.  You only need to run this version if you’re at OS X 10.5.x and were seeing Cydia errors]

PwnageTool 4.1.2 will jailbreak the following devices on iOS 4.1:

* AppleTV 2G
* iPad (firmware 3.2.2)
* iPod touch 4G
* iPod touch 3G
* iPhone4
* iPhone 3GS
* iPhone 3G

Click here to download PwnageTool 4.1.2 (Mac OSX users only).

[iPhone Dev Team]