Using Gravity Forms for a client's website (not live yet), the design dictated that watermarks were used instead of labels.
No problem - I've used the jQuery watermark plugin before (for example on the Brandwatch site www.brandwatch.com/). Everything worked fine, until I submitted a form that failed validation. I had chosen the AJAX option for the GF form and on submission, the form validation removed the watermarks, leaving it impossible to tell which field was for what data.
Simple fix: turn AJAX off for the form - watermarks reappear. Hope this saves someone some time!