Is every case of a composite UI (some nested panels and groups, for example), in which a user action causes some part(s) of that composite to change (e.g. grow, shrink, add children, etc.) while the context around remains the same a “MORPH” candidate?

Unfortunately complicated morphing effects are somewhat limited in jQuery & jQuery UI. The inability to sync animation means that change involving multiple elements at once will always be problematic. I’ve actually just spent the better part of a week extending jQuery to allow it to synchronise multiple animations and snap together edges to allow for really high quality effects. I can release the code if there’s any interest.

I’m a big believer in “form follows function,” so this is definitely just eye candy and not a UI technique to me. Perhaps you should give a more useful example. I like the sexiness of morphing one element into another, but I can’t think of an instance in which its use provides enough extra clarity to compensate for the complexity of implementing the morph transition.