ExtJS can be pretty fast, but you need to manage your code better than progressive enhancement for sure. For example, minify+gzip all the code, long expiring headers, etc.
If you have an app that doesn't need to look like a desktop app (like windows xp's file browser or MS Office apps), you need to support users without javascript running (still like 2% in the US!), etc. then jquery is a better way to go.
They are not incompatible though - I use jquery for many things - even on the same page as extjs code (jquery is absolutely tiny and doesn't add any overhead).