Hi adnixon. Yes, I have been following Wi-Fi problems too for a long while, as I had problems almost after every update. This time I learned the lesson an will ignore the next updates - exluding 4.2.2 which I hope will fix my problems.
I searched the Apple forums for 4.2.1 wifi connection problem - and found more then 100 threads! I also searched for this search term in Google and found many pages which mention network, wifi and bluetooth problems after update 4.2.1.
So I am convinced that this update is buggy and wasn't tested enough with 3G phones. I tried everything you mentioned and more, I spent almost 8 hours already.
I was happy that my battery problem (there are also numerous threads with this topic) was solved after the restore. But: After importing an older backup, the problem appeared again. So I have this options right now:
Use my Iphone whitout old settings (contacts!) and Wi-Fi - no battery problem
Use my Iphone With old settings and no Wi-Fi but only max. 30min before battery is empty
Thanks for your help, I will try my luck in the Apple Store or wait for 4.2.2.