JQuery Mobile 1.0RC2 is currently incompatible with JQuery 1.7 under IE8 #2965

Description
Disclaimer: I first posted this issue on the JQuery Mobile forum, but got no answer. I was hesitant to post it here as JQuery 1.7 is still fairly new and Mobile 1.0RC-2 may not be compatible with it just yet. Feel free to dismiss this issue if it's known.
I decided to try out the recently released JQuery 1.7 with JQuery Mobile 1.0RC2 assuming that everything would work out of the box. Everything seems to be fine under Windows 7 with Chrome 15.0.874.106m Safari 5.1.1 and Firefox 7.0.1.
However, I ran into a problem under IE8 on a Windows XP PRO SP3 machine where JQuery 1.7 had an error on load. This is the error message: Can't move focus to the control because it's invisible, not enabled, or of a type that does not accept the focus.
This seems to be related to how the mobile markup is being generated/inserted and JQuery 1.7's "Better Support for HTML5 in IE6/7/8".
Here's a jsfiddle that reproduces the issue. There is no such problem with JQuery 1.6.4.
Thank you.