I have now downloaded jquery and referenced it in the head. I have also updated the code (see below), its still not working for me - have I placed your code in the incorrect place, me thinks this will be a yes for sure. Thank you.
Code:
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN"
"http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en" lang="en">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8"/>
<title>Example</title>
<link href="style.css" rel="stylesheet" type="text/css" />
<script type='text/javascript' src='jquery-1.2.6.js'></script>
<script type='text/javascript' src='js/jquery.scrollTo-min.js'></script>
<script type='text/javascript'>jQuery(function( $ ){
//borrowed from jQuery easing plugin
//http://gsgd.co.uk/sandbox/jquery.easing.php
$.scrollTo.defaults.axis = 'xy';
$.easing.elasout = function(x, t, b, c, d) {
var s=1.70158;var p=0;var a=c;
if (t==0) return b; if ((t/=d)==1) return b+c; if (!p) p=d*.3;
if (a < Math.abs(c)) { a=c; var s=p/4; }
else var s = p/(2*Math.PI) * Math.asin (c/a);
return a*Math.pow(2,-10*t) * Math.sin( (t*d-s)*(2*Math.PI)/p ) + c + b;
};
});</script>
</head>
<body>
<div id="holder">
<div id="linktoitem">
<li><a onclick="$.scrollTo( '#item', 8000, {easing:'elasout'} );" href="#item">Link To Item</a></li>
</div>
<div id="item">
</div>
</div>
</body>
</html>