Problem Summary: Space is limited and a hint or label is needed for a text box
Pattern Key: WATERMARK
Examples: An excellent example is a search box. Additional examples are shown too.
Use When: Space is very limited, and there is need for a hint or field label for a text box
- Watermarks are rarely used.
- Watermarks can be used to provide an example value to help customers understand the format of acceptable values in a text field. However, a Hint is the usual way of providing a sample value, because a watermark is only available when the field is empty. A watermark works pretty well for fields in which any value will communicate the desired format, but even there it provides no guidance after a customer begins to type a value.
- Watermarks can be used to provide a hint, or additional information about a field.
- Watermarks can also be used to label a text box, but a Field Label is the preferred method, except when space is extremely tight and values in the text box suffice to identify what type of value is expected.
Solution: Use a text box with a watermark.
Rationale: NA
Accessibility: See Accessibility
Internationalization: See Internationalization
Supporting Example: From Outlook 
Where Used: To be supplied
Coding: Use SmartControl.
Items of Note: None
Put to Use
Status: Review
Used in Conjunction with: None
Related Patterns:
An example of where watermarks are used all over the web
Is in Search boxes. What makes search boxes different from normal text entry fields is that the text entered does not stick around. I.e., it is not saved and does not apear the next time you see the box.
It may be somewhat unique in this characteristic, but still illustrates the point.