Yup, I'd say iOS 4.2.1 broke SSL email usability in general (relative to iOS 4.1, in which it worked fine) . Apple should issue a more meaningful popup that allows you to do all the proper things related to Certificate Trust. Specifically, when any newly opened SSL connection has an invalid certificate the user should be presented with, at least
(1) Cancel this operation
(2) Continue this operation anyway for now, but do NOT save this exception (aka "trust this certificate for right now only")
(3) Continue this operation AND save this exception permanently (aka "trust this certificate until I say otherwise")
Additionally it probably makes sense for Apple to show:
(4) Show me more details about this certificate
In iOS 4.1 (and probably previous versions) Apple was showing #1, #4, and #3 (the popup showed "Cancel" "Details" and "Continue" respectively and in that order). With the release of iOS 4.2.1 Apple has swapped the middle option from #3 to #2, so even though it still says "Cancel" "Details" and "Continue," the option for "Continue" now does something less and different! To be fair, the message in the popup is and has always been more appropriate for option #2 since it doesn't explicitly say anything about saving the exception permanently, which fairly closely follows the paradigm just about every other comparable application uses (Firefox, Webkit, Mail.app, etc). In my opinion it was a bit of a security mistake previously since some poor users might just hit "continue" and not realize they've somewhat permanently exposed themselves (presumably until the untrusted certificate expires or changes).
Of course, option #3 also opens the door to the fact that there should be a way for users to remove/add/change trust for saved certificates, just like there is in OSX (you can get to saved certificates via the Keychain.app). Importantly this feature needs to exist on the phone, not as a separate application for corporate/enterprise IT people to manage profiles.
I also checked Mobile Safari and it seems to exhibit the same new (annoying) switch from option #3 to #2.
Multiple punctuation and minor grammatical fixes