<form class="infield-labels">
            
                <label for="name">Your Name</label>
                <input type="text" name="name" />

                <label for="email">Your Mail</label>
                <input type="text" name="email" />
                
                <input type="submit" value="send" />
            
            </form>

$(document).ready(function(){
    
    /*
        I'm sorry I missed putting some toggleClass functionality
        to the script. Either way didn't work as expected so you
        sadly have to add color definitions to the functions call.
        
    */
    
    inFieldLabels('#000', '#bbb');

});

function inFieldLabels(darkColor, lightColor)
{
    // do something with each matching input
    $('.infield-labels').find('input').each(function(){

        // get name of input for later reference
        var input_name = $(this).attr('name');
        
        // do something with each matching label
        $(this).parent().find('label').each(function(){
            // but only for the one matching the input-name
            if ($(this).attr('for') == input_name){
            
                // set counter to zero (for later use)
                var c = 0;
                // get inner HTML (text) of label tag
                var label = $(this).text();
                // get "label-referenced" (for="foobar") input
                var input = $(this).parent().find('input[name='+input_name+']');
                // apply label-text as input value
                input.val(label);
                // remove label element from dom
                $(this).remove();               
                
                // listen for focus
                input.bind('focus', function(){
                
                    // listen for keyboard input; but only once (use counter here)
                    $(this).bind('keypress', function(){
                        c++;
                        if (c == 1
                            && $(this).val() == label){
                            // if user starts typing color is set to dark and placeholder removed
                            $(this).css({ "color": darkColor });
                            $(this).val('');
                        }
                    });
                    
                    if ($(this).val() == label){
                        // if there is a focus on default label use light color
                        $(this).css({ "color": lightColor });
                    } else {
                        // oposite
                        $(this).css({ "color": darkColor });
                    }
                
                // listen for blur
                }).bind('blur', function(){
                    // set counter to zero again
                    c = 0;
                    if ($(this).val().length == 0){
                        // if input was left empty but back default value
                        $(this).val(label);
                    }
                    // and finaly use dark color again
                    $(this).css({ "color": darkColor });
                });
            }
        });
    })
}