Is there a freely available jQuery plugin that changes placeholder behavior to match HTML5 spec?
Before Focus

Stefano J. Attardi wrote a nice jQuery plugin that just does that.
It is more stable than Robert's and also fades to a lighter grey when the field gets focused.
I modified his plugin to read placeholder attribute as opposed to manually creating a span.
This fiddle has complete code:
// Original code by Stefano J. Attardi, MIT license
(function($) {
function toggleLabel() {
var input = $(this);
if (!input.parent().hasClass('placeholder')) {
var label = $('
.placeholder {
background: white;
float: left;
clear: both;
}
.placeholder span {
position: absolute;
padding: 5px;
margin-left: 3px;
color: #999;
}
.placeholder input, .placeholder textarea {
position: relative;
margin: 0;
border-width: 1px;
padding: 6px;
background: transparent;
font: inherit;
}
/* Hack to remove Safari's extra padding. Remove if you don't care about pixel-perfection. */
@media screen and (-webkit-min-device-pixel-ratio:0) {
.placeholder input, .placeholder textarea { padding: 4px; }
}