JQuery only highlight prepended text

Use prependTo() and go the other way instead of prepend():

$("<li>Addition li</li>").effect("highlight", {}, 1000).prependTo("#foo");

or you may want to prepend first:

$("<li>Addition li</li>").prependTo("#foo").effect("highlight", {}, 1000);

Identify the prepended text with a class and style it in your css? This may or not be suitable depending on your requirements, but i'd say its the simplest approach.