Am I missing something or is JQuery not allowed unless you edit the php files?

If so, maybe a warning in the CSS/HTMl inserts section would be helpful -- it mentions javascript, but I can't get jquery to work there

Should work.
Did you include the jquery library?

<script type="text/javascript" src="[path/]jquery.js"></script>

http://docs.jquery.com/Tutorials:How_jQuery_Works

Ahhh, I needed to fully qualify it as jQuery instead of $

I don't understand why, but it worked at least.