Thanks for the reply kbwood...
So I'm thinking this may be a bug since it works in Chrome/webkit but not in Firefox...
I even tried to set the dynamically created input element as the cancel option of the selectable but that still failed in Firefox.
The work around I had to use to get it working in Firefox was to directly bind a handler to the onclick of the input like so:
$('<input/>').click(function(){ $(this).datepicker('show'); });