It's like any technology switch when you've invested substantial time into an old system: there is real pain up front and huge fear of a new way of doing things, but the longer you put off the change the worse the problem gets and the longer it is until you reap the rewards.

There are many templating systems around and pretty much any of them will put you way ahead of the CGI in line approach to generating dynamic HTML. The big immediate advantage of using templates is they generally make it much easier to maintain the HTML independently of the code, and maintain the code independently of the HTML. It makes the logic of the code clearer and allows easier validation of the HTML.

If you find yourself tweaking HTML to accommodate jQuery, you are probably doing something wrong. The selcctors are powerful enough to handle anything. $("input[name='whatever']") or $(".someWrapper input[type='checkbox']") for example won't care about the labels, and if you need to for some reason, you can walk back up with parent(s) or closest or whatever.

If anything the wrapping labels offer more flexibility because every level of tag isolation/lineage gives a chance for enhanced CSS that still requires dummy tags in most browsers (double backgrounds, e.g.).