Okay I do notice a couple issues just from looking at the source. These are theme related issues.
The first is your theme is calling in an old version of jQuery (v1.2.6) and isn't making use of the version of jQuery that ships with WordPress (v1.3.2) and is a standard part of the platform. Your theme itself shouldn't have to call in it's own version of jQuery, it can make use of built in functions within WordPress to handle this. Gravity Forms requires the version of jQuery that ships with WordPress (v1.3.2) which is why it has a WordPress 2.8+ requirement.
Anytime jQuery is being called from the themes folder instead of the WordPress js folder it is a red flag and will lead to plugin conflicts that rely on WordPress version of jQuery.
Your theme is most likely misssng the wp_head function call that should be in the header.php file of your theme. But if you do add it you are going to need to remove the existing jquery.js script call that your head is already including.
You can read more about both the wp_head and wp_footer function calls on this page in the WordPress codex:
Posted 9 years ago on Sunday January 17, 2010 | Permalink