Can JQuery UI and JQuery tools work together? I.e. If I include both libraries on one page, will it still work?
They can be used together. The problem is that there is a jquery.tabs created in both libraries. That conflict causes the second script to not load. You have to go to http://jquerytools.org/download/ to build a custom download and do not include tabs. I just had this problem and was able to resolve it by doing this.
The only downside is you can't use the CDN, since you're stuck downloading a custom JS file and including it in your site.