How can I disable jquery_update when my admin theme is in use?
It should be noted the underline issue is really a core problem which is now fixed over at http://drupal.org/node/1480568

Anyways if people still need a fix for this this is what I have in place.

/**
 * Implements hook_module_implements_alter().
 */
function hook_module_implements_alter(&amp;$implementations, $hook) {
  // Make sure to check if the module is enabled or this will cause fatal errors
  if ($hook == 'library_alter' &amp;&amp; module_exists('jquery_update')) {
    // Move jquery update to the end. This will make sure our hook_library_alter
    // is always called before the jquery_update.
    $jquery_update = $implementations['jquery_update'];
    unset($implementations['jquery_update']);
    $implementations['jquery_update'] = $jquery_update;
  }
}

/**
 * Implements hook_library_alter().
 */
function hook_library_alter(&amp;$libraries, $module) {
  // If it is an admin path all we want to do is change the global $conf
  // variable so when jquery_update runs right after us it will use 1.5.
  if (path_is_admin(current_path())) {
    // Modifying global $conf variable, can be dangerous. Be carefull.
    global $conf;
    $conf['jquery_update_jquery_version'] = '1.5';
  }
}


This changes the variable right before jquery_udpate uses it when is an admin path. Also this doesn't hard-code to checking the url 'admin' because and admin path can also be /node/1/edit etc..