jQuery datepicker set selected date, on the fly

What version of jQuery-UI are you using? I've tested the following with 1.6r6, 1.7 and 1.7.1 and it works:

//Set DatePicker to October 3, 2008
$('#dateselector').datepicker("setDate", new Date(2008,9,03) );

Check that the date you are trying to set it to lies within the allowed date range if the minDate or maxDate options are set.

This example shows of how to use default value in the dropdown calendar and value in the text box. It also shows how to set default value to previous date.

selectedDate is another variable that holds current selected date of the calendar control

    var date = new Date();
    date.setDate(date.getDate() - 1);

    $("#datepicker").datepicker({
        dateFormat: "yy-mm-dd",
        defaultDate: date,
        onSelect: function () {
            selectedDate = $.datepicker.formatDate("yy-mm-dd", $(this).datepicker('getDate'));
        }
    });

    $("#datepicker").datepicker("setDate", date);

Noted that for DatePicker by Keith Wood (http://keith-wood.name/datepickRef.html) the following works - note that the setting of the default date is last:

    $('#datepicker').datepick({
        minDate: 0,
        maxDate: '+145D',
        multiSelect: 7,
        renderer: $.datepick.themeRollerRenderer,
        ***defaultDate: new Date('1 January 2008')***
    });