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Library demonstration is here: http://harvesthq.github.com/chosen/
I think we could significantly enhance our UX simply by adding this library to core and using it by default on all
fields. I also think it'd be good to replace our autocomplete fields (for example, taxonomy tags) with the Chosen library. I know a lot of users that I've demonstrated Drupal to have had problems figuring out comma separated data fields.
I could see this working similar to the Multiple Select field in the "Selected and Disabled Support" section of the demo page. If you start typing something that's not in the list currently, the demo shows 'No results match "Your input string"'. We could extend that to say 'No results match "Your input string". Click here or hit enter to add a new term.'
There is one caveat with this library. From the demo page: "All modern browsers are support (Firefox, Chrome, Safari and IE9). Legacy support for IE8 is also enabled." It sounds like IE7 is not supported - but fortunely the dependency onis solved, as it has been already commited.