Rendering labels within text fields

I'm trying to render labels inside text fields. When the user begins
typing, the labels fade away and become invisible.To accomplish this,
I'm giving the TextBox widgets 'background: none; z-index: 10'; and
I'm rendering the labels behind them with 'background: #fff; z-index:
1'.

Just incidentally, I got the idea for this from
http://www.zurb.com/article/271/making-forms-convert-through-awesome-inli.

The problem: when I click on a field, if the click happens to land on
the label, as opposed to an empty space beside the label, the click
event does not fire and the field does not receive focus.

Do you have any idea why this might be happening? Know how to fix it?
Alternatively, do you know of a library that might obviate my coding
this up?

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