problem in backoffice with parent categories and jquery

[David Henry]

since upgrading to 1.6.0.6 and now 1.6.0.8 on 2 sites we can no longer add a new category with a parent, it gets added to the root and we cannot move it.

 

When the page loads it displays both Collapse all and expand all are both displayed, but nothing underneath.

 

There are no categories loaded and saving will only only place the category in the root.

 

I've attached a screen which illustrates this.

 

Obviously this is a showstopper so any help would be appriciated.

 

All modules have been updated, especially the category modules.