jQuery 1.3.2 is in WordPress 2.8, but the most exciting changes are in the automatic concatenation and compression of scripts via the script loader.
Andrew Ozz says “This feature can easily be extended to include scripts added by plugins and to use server side caching, however that would require some changes to the server settings (.htaccess on Apache).”
I have yet to figure out how to extend that feature to scripts in my plugins, but I’m working on it.