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Yes, Kango supports JS libraries in both background and content scripts.
See also
Kango is free for open source non-profitable projects. Free license package includes support for Chrome, Firefox and Safari.
IE support only available in commercial package, contact extensions@kangoextensions.com to get more information.
Try to resave all your project sources using “UTF-8 with BOM” encoding.
Android and iPhone browsers doesn’t support extensions.