The Sortable plugin, when in Grid mode, interacts oddly depending on the vertical position of the mouse cursor within the dragged item. Steps to reproduce:
1) Visit http://jqueryui.com/demos/sortable/#display-grid
2) Click on item "3", in the space between the top of the digit "3" and the top border.
3) Drag it horizontally across "4" - note that four never shifts across, unless you also drag "3" downwards.
4) Reload the page.
5) Click on the very bottom of item "4".
6) Drag it horizontally to the left, above "3" - note that it also needs to be moved upwards for the sort to occur.
I'm actually working with a non-grid sortable widget which uses float on the sortable items, to achieve a grid-like feel with mixed-height items. Most of the items that require sorting are significantly taller than they are wide, so this issue is being run into all the time - still easy once you have the knack of dragging to the top/bottom as well, but it can mean sorts will *never* register if also used with the Constrain option - if you've clicked too near the top or bottom!
I'm aware that this is "unsupported" behaviour, but I figure that if the Grid view behaviour is fixed, it's likely to resolve the issues for me as well :)
Keep up the great work!