I've used jammit to do my asset packaging so far, but my next application will be in Rails 3.1
Should/Can I still use Jammit? Or should I work with the built-in asset pipeline?
You can still use Jammit, but the built in asset pipeline is The Rails Way™.
I'd recommend you try out the asset pipeline/Sprockets - if you don't like it, it's as simple as moving the javascript and css files back to the public directory and setting up Jammit the old way.
I found that setting up the asset pipeline the first time around for browser specific css was a little non-intuitive, but, that was just me being unfamiliar with the whole process. Sprockets works well and allows you to use ERB/HAML with your coffee script or sass (if you want.)