Вот как это делает твиттер:
HTML:
<p class="search-holder" style="opacity: 0.6;">
<label for="searchform_q">Search for a keyword or phrase…</label>
<input type="text" tabindex="8" size="30" name="q" id="searchform_q" class="round-left" accesskey="/"><input type="submit" value="Search" tabindex="9" name="commit" id="searchform_submit" class="submit round-right">
</p>
JQuery:
$('.search-holder').mouseenter(function(){
$(this).animate({opacity:1});
}).mouseleave(function(){
$(this).animate({opacity:0.6});
});