Thanks guys for your messages.
The error was on my part. For hover event, I was not passing function for "out". Therefore the handler was passed as undefined in jQuery.event function and that causing error for statement ,
if ( !handler.guid )
written at 1834 line of jquery-1.2.6.js file.
While using I thought that out handler is not mandatory to specify, but I guess I am wrong.
Strangely, FF / Chrome does not prompt error but IE does :) which is bit different than what it used to be.
Regards,
Jatan