A little update on this. I'm pretty sure you did something wrong in configuring it for local files or it would have worked. Maybe the script path wasn't correct.
I've found it works just fine using the latest versions of both jQuery and jQueryUI from the google cdn.
It turns out the problem I'm seeing with the time picker in the blog only happens in Artisteer 4 skins. Using other skins it works just fine.
So now I need to figure out exactly what it is on the Artisteer 4 skins causing this problem because it even happens with the currently configured older versions of jQuery and jQueryUI. It seems to be something that affects the jqueryui slider used in the time picker causes a script error.