JQuery Intellisense not working in VS2008

For intellisense to work in Visual Studio for JQuery, the following is required:

1. Visual Studio SP1 applied
2. jquery-1.2.6-vsdoc.js file downloaded from jquery and put in scripts folder for the project
3. The master page must reference jquery files like this:



Note: The ~ in front is important.

Links:
http://weblogs.asp.net/scottgu/archive/2008/11/21/jquery-intellisense-in-vs-2008.aspx
http://blog.bvsoftware.com/post/2008/11/06/JQuery-Intellisense-in-Visual-Studio-2008-Tip-if-its-not-working-in-MVC.aspx