Why not both? Use jQuery for animated effects and CSS as the fallback. This gives you the benefits of jQuery with graceful degradation.
CSS:
a {color: blue;}
a:hover {color: red;}
jQuery (uses jQueryUI to animate color):
$('a').hover(
function() {
$(this)
.css('color','blue')
.animate({'color': 'red'}, 400);
},
function() {
$(this)
.animate({'color': 'blue'}, 400);
}
);