That's odd. I can confirm that it works in popups, both locally and on live environments.
I guess it's a good idea to try to narrow this down.
Do you run the same version of SilverStripe in both environments?
Do you get any errors in Firebug when you try to open a colorpicker on the live server?
Any files missing (look at the "Net" tab in Firebug)?
Does the same issue occur in every browser?
Hm that error can occur if jQuery is being included multiple times.. but that would produce the same error on the local installation as well. Maybe try to re-upload the jsparty directory and make sure it has the appropriate permissions (files must be globally readable)
Yeah tried re-uploading the jsparty directory earlier but didn't really think it was going to be that as the colour picker is working in the CMS (not within popup). Just changed the readable permissions for jsparty to fully readable (777) and still no joy! As you can see in the attachments the local enviroment is making 4 requests while the live enviroment is only making 3. The missing request happens to be the jquery.js
Hm. Never saw anything like that. So there's not even an attempt to load jQuery? Did you empty the browser cache before monitoring the Net-Tab?
Try to delete the base.js, cmsmain.js and leftandmain.js files in the assets folder too. They are automatically generated, so deleting them is not a problem. If that doesn't help, try a flush on the admin.. eg. yourdomain.com/admin?flush=1
Other than that, there's not much advise I can give. I suspect it could be the auto-generated files though.