- Every control is labeled so that the user can identify it and tell what it means and does.
Note: This does not preclude one label for multiple controls, if the meaning is clear.
Example: 
- Labels use title case, meaning that the first letter of every word is capitalized, except for prepositions, articles and other small or less important words.
Example: Unit of Measure
Exception: If the label is a long sentence or phrase, sentence casing should be used. This should be rare; labels should normally be short, because customers should not have to read more than is needed for understanding. - Labels for most controls go to the left of their controls and are left-aligned with no colons or other punctuation following them. Vertically, the top of a label aligns with the top line of its control.
- Alternatively, labels can go above the controls, with the controls indented 1 em from the labels. This is good for long labels and is faster in rapid entry scenarios.
Recommended: Place the labels above only where rapid entry is anticipated.
Recommended: In a given column, keep all labels to the left of their controls or all of them above.
Example:

- Labels and controls do not touch each other, but have the width of a space between them.
Example: 
- Watermark labels for text boxes are rarely used -- only when space is very tight and it is clear after the field is filled in what it is.
Example: 
- Similar labels on different panels have consistent names. For example, don't use Name one place and Description another.
- Underlining is reserved for links. Other text is never underlined.
Radio Buttons and Check Boxes
- Labels for radio buttons are displayed to the right of the option buttons. The label for a group of option buttons is displayed to the left or above, as for most controls.
- Labels for check boxes are displayed to the right of the check box.
Note: In a circumstance where this does not look good, use Yes-No radio buttons, as for "Solicitation" in the top example.
Example: See main example - Labels for check boxes do not begin with "Is."
Exception: The "Is %" column in the quantity table on the Price Sheet page, because it is not clear without it.
One Label for Multiple Controls
- Omit labels and put several fields on a line when it is natural to do so and the meaning is clear.
Example:1 Box
not
Quantity 1
Unit Box
Items of Note: None
Put to Use
Status: Review
Used in Conjunction with: NA
Related Patterns:
| Attachment | Size |
|---|---|
| Field Labels - Vertical Example.png | 25.36 KB |
| Field highlighting Jeremy.png | 200.8 KB |

I don't like #i
Whereas you might be correct that there aren't a large number of places to make use of watermarks (though this is debatable itself); I think there are places we do want to use them and their usefulness in these situations is great enough that we will indeed use watermarks.
At the very least we should define how and when we want to use them and you can recommend against their usage if you'd like.
I plan to add this feature to SmartControl in the near future, which of course is driven by BOD, which means almost every field in the system will be able to make use of watermarks in the not too distant future.
jeremy