Gulp Example

gulp example2

So, I reproduce the problem you have and came accross this working solution.
First, lets check gulp plugins you need:
gulp-jade
gulp-livereload
optional: gulp-load-plugins
In case you need some of them go to:
http://gulpjs.com/plugins/
Search for them and install them.
Strategy: I created a gulp task called live that will check your *.jade files, and as you are working on a certain file & saving it, gulp will compile it into html and refresh the browser.
In order to accomplish that, we define a function called compileAndRefresh that will take the file returned by the watcher. It will compile that file into html and the refesh the browser (test with livereload plugin for chrome).
Notes:
I always use gulp-load-plugin to load plugins, so thats whay I use plugins.jad and plugins.livereload.
This will only compile files that are saved and while you have the task live exucting on the command line. Will not compile other files that are not in use. In order to accomplish that, you need to define a task that compiles all files, not only the ones that have been changed.
Assume .jade files in /jade and html output to /html
So, here is the gulpfile.js:
var gulp = require('gulp'),
    gulpLoadPlugins = require('gulp-load-plugins'),
    plugins = gulpLoadPlugins();

gulp.task('webserver', function() {
  gulp.src('./html')
    .pipe(plugins.webserver({
      livereload: true
    }));
  gulp.watch('./jade/*.jade', function(event) {
    compileAndRefresh(event.path);
  });
});

function compileAndRefresh(file) {
  gulp.src(file)
    .pipe(plugins.jade({
    }))
    .pipe(gulp.dest('./html'))
}
Post edit notes:
Removed liveReload call from compileAndRefresh (webserver will do that).
Use gulp-server plugin insted of gulp-connect, as they suggest on their repository: "New plugin based on connect 3 using the gulp.src() API. Written in plain javascript. https://github.com/schickling/gulp-webserver"