So does MediaWiki catch a <math> tag, even if $wgUseTex is disabled? I've commented that line out of LocalSettings.php and tried to use WikiTex to render my mathematics and I get the actuall text printed to the screen (example at http://pyarie.sf.net/index.php/Sandbox/). I wonder if that's because MediaWiki catches the <math> tag before it can be processed by WikiTex?
By the way, WikiTex is pretty amazing. For those looking to render other types of TeX based output (there was a message a bit ago about it), you should check this out. There's even a package to translate into J.R.R. Tolkien's Elvish script. Pretty crazy!
Cheers, -JW