hi, I had the same problem.
My jquery function call for farbtastic was in the body of the document.
In WP version 3.4 it need to be loaded in the head.
To do this, I made a JavaScript file of my function call and copied it my theme options folder, I called it farbtastic-instance.js
this file contained the following, but your will most likely be diffirent
jQuery(document).ready(function() {
jQuery('#demo').hide();
var f = jQuery.farbtastic('#picker');
var p = jQuery('#picker').css('opacity', 0.1);
var selected;
jQuery('.colorwell')
.
.
.
Then, at the top of you theme-options.php page, insert:
wp_register_script( 'farbtastic-instance', get_template_directory_uri() . '/inc/farbtastic-instance.js');
wp_enqueue_script( 'farbtastic-instance' );