Probaby due to regular expression syntax, newlines present in an HTML string sent to the $() constructor will cause a browser hang. For example,

$('<div>test test</div>');

works fine, but

$('<div>test

test</div>');

kills the browser (Firefox 2.0.0.1 Mac).

If the newline is not allowed, a more graceful failure is needed. Something along the lines of:

html = html.replace(/[

]/g, ' ');

should be sufficient to allow newlines.