Run the command:

which git
You'll probably see /usr/bin/git -- the Apple supplied version. This will be because /usr/bin appears in your PATH environment variable before /usr/local/git/bin. You can verify this by running the command:

echo $PATH
If that is the case then run this command:

export PATH=/usr/local/git/bin:$PATH
and then try git --version again. You should now get 1.8.4.2. This hasn't fixed it permanently yet though. You'll need to add the export PATH=... line to your ~/.bashrc so that it gets set for every shell.