Let’s say you have a login form with the standard username and password input fields, but instead of labels, you want to have grayed out text inside the fields to act as labels. Since the label’s aren’t actual input, they shouldn’t be submitted as actual data if a user submits the form without entering anything, [...]

At certain times you might want to have a form input field have a description or default value that automatically clears when the user clicks the field to enter text.
An example of this is Digg’s search box. By default, it reads, “Search Digg…”, but when you click it, the default text disappears and makes room [...]