I know little about the inner workings of jQuery, but I was encountering a "too much recursion" bug in 1.2.6, when used in conjunction with the NestedSortablesWidget (1.0).
SYMPTOMS AND CONDITIONS: Whenever my first drag on a sortable was upward, I would hit the bug; all other drags thereafter would fail. If my first drag was downard, no other problems were encountered. HACK/FIX: I have changed line 1160 in my copy to: if ( true || jQuery.browser.msie) so that it always chooses that way to execute the loop and it fixes my bug (Firefox 2.0.0.9 on Mac OSX 10.5.3/Leopard). I am not knowledgeable enough regarding jQuery bug postings, etc. to locate where to file this officially, but I thought I would raise it here in case it is deemed worth looking into by others.