The $.extend() documentation says:

$.extend( Object target, Object prop1, Object propN ) returns Object Extend one object with one or more others, returning the original, modified, object.

Currently, $.extend dies after hitting a undefined value, even if there are more valid arguments in the list. This is not good behavior. Consider the following:

this.settings = jQuery.extend({}, this.defaults, arguments.options, this.userOptionsFromCookie); // named to illustrate purpose

If I don't need to pass the function any arguments, arguments.options is undefined. I still want user options to modify the defaults however. Rather than using a while != null loop, you should be using a for loop to ensure that all arguments are processed. An argument with an undefined value should be ignored but it shouldn't halt processing.