SO jQuery Fiddle

Test Fiddle mainly for SO Questions jQuery 1.4.3, UI 1.8.5

by Nick Craver

HTML

<link rel="stylesheet" href="http://ajax.googleapis.com/ajax/libs/jqueryui/1.8.5/themes/ui-lightness/jquery-ui.css">
<div id="outer"><div id="inner"></div></div>

CSS

#inner
{
  background: #ABC;
  width: 200px; height: 200px;
}
#outer
{
  background: #DEF;
  width: 200px; height: 200px;
}

JavaScript

$("#inner").mouseenter(function () {
  $("#outer").animate({ 'padding' : 20 }, "slow");
}).mouseleave(function () {
  $("#outer").animate({ 
    'padding-top' : 0,
    'padding-right' : 0,
    'padding-bottom' : 0,
    'padding-left' : 0,
  }, "slow");
});