For me it's all down to philosophy. Prototype adds a bunch of global variables and extends loads of built-in ojbects. That's fine, unless you ever want to include code that has a different idea about how any of those extensionss should work (like mooTools, which I also avoid on philosophical grounds). jQuery adds just one global variable (called jQuery) along with a revertible alias (the $ symbol). That pretty much guarantees jQuery will work flawlessly with any other code.

newer versions of jquery also allow you to clean up the one global variable it adds, afaik, moving it to a location of your choosing. it's very clean.