Update: this issue was a result of jQuery 1.7 vs 1.8. Do not ever use promises in 1.7 beacuse they aren't chainable with returning a promise inside a .then. 1.8 looks like they didn't mess it up.
http://jsfiddle.net/delvarworld/28TDM/
// make a promise
var deferred = $.Deferred();
promise = deferred.promise();
// return a promise, that after 1 second, is rejected
promise.then(function(){
    var t = $.Deferred();
    setTimeout(function() {
        console.log('rejecting...');
        t.reject();
    }, 1000);
    return t.promise();
});
// if that promise is successful, do this
promise.then(function() {
    console.log('i should never be called');
})
// if it errors, do this
promise.fail(function() {
    console.log('i should be called');
});
deferred.resolve();
Expected: 'i should be called'
Actual: 'i should never be called'
Problem: I want to chain callbacks and have any one of them be able to break the chain and  trigger the fail function, and skip the other chained callbacks. I don't understand why all of the thens are triggered and the fail is not triggered.
I'm coming from NodeJS's Q library, so I tried it with .then first. However, changing it to .pipe has no effect.
 
     
    