Moodle 2 comes with a lovely html_writer API for outputting HTML tags, putting and end to potentially messy hand-written and echoed HTML. It also comes with some lovely new Javascript APIs. However, I'm wondering what the preferred method is for outputting HTML from within Javascript code. Is there an html_writer implementation that I'm yet to find, should we be building DOM nodes at attaching them to the relevant parent, or should we just be echoing HTML as we used to in PHP?
One example is http://cvs.moodle.org/moodle/user/selector/module.js?view=markup. Look at the output_options function.
Depending on the information you're displaying, it may be appropriate to make the AJAX response return html (as part or all of its return value). That way you can write the html in php.
IMO this approach is quite appropriate for 'displaying extra thing on page' type AJAX requests, especially if code is shared with a non-AJAX version to display the same type of thing. But it's not so appropriate for 'returning data to modify existing page element' type AJAX requests. Opinions might differ...
--sam