I was able to accomplish this by:
1) On first page load, have your server-side-script generate the HTML table (with the columns and rows of data). This is for SEO.
2) On the same first page load, have your server-side-script also dump JSON of the data into your jqgrid initialization or somewhere on the page.
3) Have your jqgrid (named the same as your HTML table in step1) initially set to local and load the the dumped JSON data. (Note: also use localReader to ensure the pager shows correct info)
4) After grid is initialized, immediately have the grid update to read from remote source (but don't trigger a reload).
5) The next operation a user performs on the grid, it will pull from remote source.
For more details on this approach to progressive enhancement with jqgrid, you can see it here on my question/answer in stackoverflow here