$(\".block li\").hover(
function(){
$(this).animate({backgroundColor: \"#000\"});
},
function(){
$(this).animate({backgroundColor: \"#fff
This may require some change to your HTML and CSS (which could be effected by script if you don't have direct HTML/CSS control).
I would split each '.block li' element into two elements: one that will be the background element that can be animated with $.fadeTo(), and another element laid over the top that will contain your foreground content and on which you can call $.hover() with your handlers.