.append() (and other methods) working correctly in jQuery 1.2.6

All paragraphs have a <b> element appended and prepended, and clicking all <b>s triggers an alert!
See regression in jQuery 1.3.1

<--prepended || appended-->

<--prepended || appended-->

<--prepended || appended-->

<--prepended || appended-->

<--prepended || appended-->

Prototype --> Click Me!