just to confirm, ANY javascript piece of code relying on web2py.js functions will still work as intended. At the end of the new web2py.js there is a "compatibility layer" that remaps old function names to the new ones.
If someone added his own function, e.g. at the end of "old" web2py.js just to avoid creating a new js file, he/she can as well append those functions to the new web2py.js, after the "compatibility layer".
However, this (editing web2py.js directly) is NOT encouraged, as Anthony explained very well in the previous posts.
Problems will only arise if someone modified e.g. web2py_component() altering the default behaviour. This is of course not encouraged/supported in any way.
BTW, shouldn't take that long to adjust everyone owns "customizations" to the new "style". There are also lots of comments.
As for what jquery version is required, I can't really say anything in regards to the "old" web2py.js. The new one should be fine with query > 1.7, so ~ anything from november 2011 onwards **should work**.
it's true that there's a theoretical break in this, but people relying on jquery <= 1.6 should be encouraged (or at least feel a little bit of pressure) to move forward (for speedups/optimizations at the very least). I'm not aware of any jquery plugin that requires such an ancient version of jquery.