As of 1.10.4 I'm still experiencing this issue.
The problem seems to be in jquery.ui.core.js, line 68 (https://github.com/jquery/jquery-ui/blob/1-10-stable/ui/jquery.ui.core.js), where static and relative properties are being grouped together. Relative positioning has the same effect on child element positioning as absolute positioning, so it should not be grouped with static positioning, which has a completely different effect on child element positioning.
I changed it in my copy of jQueryUI, removing "|relative" from "/static|relative/", and adding it to "/absolute/" (making it "/absolute|relative/"). It is now working great in my copy, although I'm only using the Sortable interaction, and haven't done any testing with any of the other interactions.
I went to fork the source code, but it has changed considerably since 1.10.4, so I'll wait until the new version is released so I can test it out before changing the code and making a pull request.