BuddyPress.org

solved! I used this code from this page http://snipplr.com/view.php?codeview&id=26963
Detailed explanation below.

my final code:

<?php
wp_deregister_script('jquery');
wp_register_script('jquery', 'http://ajax.googleapis.com/ajax/libs/jquery/1.5.0/jquery.min.js', false, '1.5.0');
wp_enqueue_script('jquery');
?>

$(document).ready(function(){
$(".l1").click(function(){
$("#login-panel").toggle();
$("input[type='text']:first", document.forms[0]).focus();
});
});

The code I added:

<?php
wp_deregister_script('jquery');
wp_register_script('jquery', 'http://ajax.googleapis.com/ajax/libs/jquery/1.5.0/jquery.min.js', false, '1.5.0');
wp_enqueue_script('jquery');
?>

This allowed me to delete this line from my original code:

$(document).ready(function(){
$(".l1").click(function(){
$("#login-panel").toggle();
$("input[type='text']:first", document.forms[0]).focus();
});
});