step1.watermark.html

<script src="jquery.js"></script>
<script src="jquery.watermark.js"></script>
<input type="text" name="a" title="Click here to type..." />
<textarea name="b"></textarea>

step2.watermark.js

// title attr. + gray watermark (default)
$("input").watermark();
// custom color + text
$("textarea").watermark({color: "#87c8ff", text: "Reduce clutter..."});