The first part allows you to first drag an element into a sortable div, which is working fine. I then want to have that div become sortable as well so I can drag new elements (p
I agree with Nick P in that I think it's a bug in sortable. The other items being sorted lose the sort-ability when sorting finishes.
I added
$('.part-holder').sortable('refresh');
before
$('.part-holder', ui.item).sortable({
which worked for me in Chrome 11, FF3.7 and FF4.0b12pre.