The latest web2py trunk jQuery is 1.5.1 If using a buttonset from the jQueryUI Button widget the Javascript trips on the label tag 'for' attribute and throws an error leaving the buttonset as a set of radio boxes instead of making them into buttons. This can be seen in the jQueryUI Button Toolbar demo as an example (http://jqueryui.com/demos/button/).
I haven't figured it out yet and I am not discouraging web2py from moving forward to 1.5.1, I am just mentioning this to document it. I can keep my application at jQuery 1.4.4 until this is fixed by the jQuery/jQueryUI group.