I am using a modified version of the plugin (v1.3.10) and have resolved the toggle/collapse issue. I commented out the following code in more-fields-write-js.php (around line 143) since WordPress 2.9.1 ui.core.js does the same thing in a different way and the following code was undoing that. I don’t think this breaks anything else.
jQuery(‘.postbox h3, .postbox .handlediv’).unbind(‘click’);
jQuery(‘.postbox h3, .postbox .handlediv’).click( function() {
jQuery(jQuery(this).parent().get(0)).toggleClass(‘closed’);
postboxes.save_state(‘<?php echo sanitize_title($type); ?>’);
} );