The difference between WP 2.7 and WP 2.8 in terms of jQuery and jQuery UI is the major version upgrade of both libraries. The new one libraries are not backward compatible to stuff written for older versions.
Especially jQuery UI Tabs has been changed (internal and also in usage).
This is the usage at WP 2.7 with jQuery UI v1.5.2
And this is the usage for WP 2.8 with jQuery UI v1.7.1
The Tabs now expects as selector the hosting div container instead of the ul list the older expects.
If you need a 2 version safe usage, try something like this:
//jQuery UI 1.5.2 doesn’t expect tab ID’s at DIV, so we have to apply a hotfix instead
var needs_jquery_hotfix = (($.ui.version === undefined) || (parseInt($.ui.version.split(’.')) < 7));
$("#tabs"+(needs_jquery_hotfix ? “>ul” : “”)).tabs();
This type of internal change in jQuery UI affects also other components so a lot of compatibility work has to be spend by authors of plugins and themes.