Basically, see here: http://jsbin.com/ayige

Firefox (and possibly some other browsers?) do not let you style an empty IMG tag with a width/height, so there's a broken placeholder under your sortable. Chrome seems to do just fine though and apply the width/height to the image.

I've fixed this on my site once already in the past (forgot to report this), but noticed it pop up again when I updated to the latest files. My fix was basically to put ".attr('src', 'url to a spacer gif')" in the _createPlaceholder function where it defines the "f" variable in the e.placeholder.element function.