Sorry guys, it must be conflicting with something else. I couldn't possibly say what without testing out on someone's site that is having issues.
One final thing for you both to try, make sure you have uploaded the jquery-1.4.1.js file to the countdown/js folder.
Find:
Code:
<script language="Javascript" type="text/javascript" src="countdown/js/jquery.lwtCountdown-1.0.js"></script>
Above it add:
Code:
<script type="text/javascript" src="https://ajax.googleapis.com/ajax/libs/jquery/1.6.2/jquery.min.js">
Save the block/template
CHMOD the countdown/js folder to 775
And if you're using vBOptimise go back to your AdminCP > vBOptimise > Flush Cache
See if that works