The jQuery team has now promptly come out with a 'bug-fix' jQuery 1.3.1 release. This release mainly fixes browser compatibility issues.
You can download this new release from here jQuery 1.3.1. Some additional info about the release can be read from here
Update: jQuery 1.3.2 along with Visual Studio 2008 has been released http://www.devcurry.com/2009/02/jquery-132-intellisense-for-visual.html