I do not remember MySpace allowing javascripts to run on a profile.  And I would not want that either.  The Dolphin method of customizing profiles was fine, allowing for different background colors or images, and css changes to the blocks boarders and fonts.  I think custom css would work fine.  All sources of css would have to be tested and people would have to obtain that from a trusted source.  A separate page for entering css changes would be in order for a profile in case the user broke their profile and had to reset it.  I can see a html purifier filter needing to be implemented with this idea.

You could have a predefined set of colors (or an option to enter a hex number), border widths, etc., and just let the user choose from those defined items in the settings. Bypass the "allowed HTML/CSS" altogether. It would still allow a large number of creative styles, depending on how many things were allowed to be customized.