You really have two tools to work with, html() and using the normal jQuery manipulation operators on an XML document and then insert it in the DOM.
To create a widget, you can use html():
$('#target').html('<div><span>arbitrarily complex JS</span><input type="text" /></div>');
I assume that's not what you want. Therefore, look at the additional behaviors of the jQuery selector: when passed a second parameter, it can be its own XML fragment, and manipulation can happen on those documents. eg.
$('<div />').append('<span>').find('span').text('arbitrarily complex JS'). etc.
All the operators like append, appendTo, wrap, etc. can work on fragments like this, and then they can be inserted into the DOM.
A word of caution, though: jQuery uses the browser's native functions to manipulate this (as far as I can tell), so you do get different behaviors on different browsers. Make sure to well formed XML. I've even had it reject improperly formed HTML fragments. Worst case, though, go back and use string concatenation and the html()
method.