Hi Jonathan,
It looks to me like your header does not have the wp_head hook. Also, you are loading jQuery manually, which will cause a conflict with the plugin.
Try adding this line
<?php wp_head();?>
Just before </head> in your header.php template, and get rid of whatever is loading that version of jQuery, and see what happens.
For future reference, if you want to load javascript libraries in your theme, the best way to do it is with the wp_enqueue function. That way even if another plugin tries to load up the same script, it is only loaded once.
Cheers,
Dalton