This is what I am doing right now:
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01//EN"
   "http://www.w3.org/TR/html4/strict.dtd">
<html lang="en">
<head>
    <meta http-equiv="Content-Type" content="text/html; charset=utf-8">
    <title>untitled</title>
    <meta name="generator" content="TextMate http://macromates.com/">
    <style type="text/css" media="screen">
        body { font-family:"HelveticaNeue-Light"; margin: 0px; }
        input { width: 75%; }
    #wrap { background: #f1f1f1; border: 1px solid #d9d9d9;  padding: 0px; }
/*    #sprite { position: relative; background: #909090; width: 20px; height: 20px; padding: 20px; }*/
        #spriteChatBubble { position: relative; background: #fff; border: 1px solid #000; font-size: 10px; max-width: 200px; }
        #controlArea { margin-top: 50px; }
        .button { background: #fff; color: #0080ff; padding: 5px; border: 1px solid #0050ff; text-decoration: none; }
        .button:active { background: #0080ff; color: #fff; }
    </style>
    <script type="text/javascript" charset="utf-8">
        $(document).ready(function() {
            // on load
            updatePos();
            // get it ready
            $("#sprite").css("background-image", "url(left100by100.png)");
            // our main block
            function detectCollision() {
        var spritePos = $("#sprite").position();
        var spritePosLeft = spritePos.left;
        var spritePosTop = spritePos.top;
        var chunkPos = $("#chunk").position();
        var chunkPosLeft = chunkPos.left;
        var chunkPosTop = chunkPos.top;
        // show the chunk's position values (test)
        $("#posLeftChunk").text(posLeftChunk);
              if (spritePosLeft == chunkPosLeft || spritePosTop == chunkPosTop) {
          // make it go somewhere random! :D
                var randomLeft = Math.floor(Math.random() * 100);
                var randomTop = Math.floor(Math.random() * -100);
          // $("#chunk").hide();
                $("#chunk").css("top", randomTop + "px");
                $("#chunk").css("left", randomLeft + "px");
          // $("#spriteChatBubble").animate({"top": "-=" + randomTop}, "fast");
              }
            }
            setInterval(detectCollision, 500);
            function insertValues(name){
              var name = "foop";
              var spritePosition = $("#sprite").position();
              var leftVal = spritePosition.left;
              var topVal = spritePosition.top;
            }
            insertValues("");
            function showMessage(message) {
              $("#spriteChatBubble").show('slow');
              $("#messageText").text(message);
              $("#spriteChatBubble").delay(5000).hide('slow');
            }
            function updatePos() {
              var position = $("#sprite").position();
              $("#posLeft").text(position.left);
              $("#posTop").text(position.top);
              // updatePos();
              // insert the values into a database
              insertValues("");
            }
            $(document).keydown(function(ee) {
              $("#spriteChatBubble").hide();  // no need to show this!
              // if ($("#sprite").position.left < 0) {
              //           alert();
              //         }                           // fail
              if (ee.keyCode == 37) {
                // going left!
          $("#sprite").css("background-image", "url(left100by100.png)");
          // alert("going left!");
          $("#sprite").animate({"left": "-=50px"}, "fast");
          $("#spriteChatBubble").animate({"left": "-=50px"}, "fast");
          updatePos();
              } 
              if(ee.keyCode == 39) {
                // going right!
          $("#sprite").css("background-image", "url(right100by100.png)");
          // alert("going right!");
                $("#sprite").animate({"left": "+=50px"}, "fast");
                $("#spriteChatBubble").animate({"left": "+=50px"}, "fast");
          updatePos();
              }
              if(ee.keyCode == 38) {
                $("#sprite").animate({"top": "-=50px"}, "fast");
                $("#spriteChatBubble").animate({"top": "-=50px"}, "fast");
          updatePos();
              }
              if(ee.keyCode == 40) {
                $("#sprite").animate({"top": "+=50px"}, "fast");
                $("#spriteChatBubble").animate({"top": "+=50px"}, "fast");
          updatePos();
              }
            });
            $("#left").click(function() {
              $("#sprite").animate({"left": "-=50px"}, "fast");
         updatePos();
            });
            $("#right").click(function() {
              $("#sprite").animate({"left": "+=50px"}, "fast");
         updatePos();
            });
            $("#talkButton").click(function() {
              showMessage($("#speakField").val());
              $("#speakField").val("") ;
            });
        });
    </script>
    <!-- Date: 2011-05-23 -->
</head>
<body>
  <!-- <div id="spriteChatBubble">
      <a class="mt" id="messageText">message</a>
    </div> -->
  <!-- avatar (you, the player) -->
    <div id="sprite" style="position: relative; background: url('right100by100.png'); width: 100px; height: 100px;">
    </div>
  <!-- chunks -->
    <div id="chunk" style="position: relative; background: #909090; width: 20px; height: 5px; top: 100px; left: 80px;"></div>
    <div id="controlArea">
      position.left: <a id="posLeft">0</a><br>
    position.top: <a id="posTop">0</a><br>
    <br><br>
    position.left (chunk): <a id="posLeftChunk">0</a><br>
    position.top (chunk): <a id="posTopChunk">0</a><br>
      <!-- <input type="text" id="speakField" onchange="javascript:void(0);">
         <a href="javascript:void(0);" class="button" id="talkButton">talk!</a>
         <a href="javascript:void(0);" onclick="showMessage('foo');" class="button" id="">test it</a>
         <br><br>
        <a href="javascript:void(0);" class="button" id="left">(</a>
        <a href="javascript:void(0);" class="button" id="right">)</a>
         -->
    </div>
</body>
</html>
Which moves it by 50 pixels in the desired direction, however detecting div collision (the sprite hitting the "chunk") and then it needs to be relocated. Do you know a better way to detect the divs colliding? Thanks.
 
     
     
     
     
    