I have a testcase developed. It's not "minimal", in that I added a few screen elements so the screen refresh and jump would be more obvious.
There are instructions on the page for duplicating the issue. I can reproduce the anomaly in Firefox 3.0x and 3.1x, and Safari 3.1x and 3.2x. Safari does not have the screen refresh problem, but the page does "jump".
Basically, if you scroll the page to the bottom (so that the final list element is visible), and attempt to drag one of the elements in the sortable list of images, a screen jump occurs (in Firefox and Safari), and a screen flash or refresh occurs (in Firefox). These anomalies do not occur if you are scrolled up the page and initiate a drag when the list's final image is not visible at all on the screen.
This bug is actually visible in the demos on the JQuery UI site, on this page:
To reproduce, resize the window so that the page scrolls, but when you scroll to the bottom, you can see the final elements in the list. Now click on one and start a drag (just a few pixels is required, it can even be a small drag horizontally). You will see the page "jump".
I created the test case to make the effect more obvious.
*IE 7 displays a completely different bug, which will need to be addressed in another ticket, if it is not already being tracked.