var mooPlaceholder = new Class({
    // behaviour for default values of inputs class
    Implements: [Options],

    options: {
        // default options
        htmlPlaceholder: "placeholder", // the element attribute, eg, data-placeholder="MM/YY" -> "data-placeholder"
        unmoddedClass: "unchanged", // apply a class to the unmodded input, say, to grey it out
        parentNode: document, // limit to a particular set of child nodes
        defaultSelector: "input[placeholder]"
    },

    initialize: function(options) {
        this.setOptions(options);
        this.nativeSupport = 'placeholder' in document.createElement('input');
    },

    attachToElements: function(selector) {
        // basic function example that uses a class selector to
        var inputs = this.options.parentNode.getElements(selector || this.options.defaultSelector);

        if (inputs.length) {
            inputs.each(function(el) {
                this.attachEvents(el);
            }, this);
        }
    }, // end attachToElements

    attachEvents: function(el, placeholder) {
        // method that attaches the events to an input element.
        var placeholder = placeholder || el.get(this.options.htmlPlaceholder);
        if (this.nativeSupport || !$(el) || !placeholder || !placeholder.length)
            return;

        el.set("value", placeholder).store("placeholder", placeholder);

        // append unmodded class to input at start
        if (this.options.unmoddedClass)
            el.addClass(this.options.unmoddedClass);

        // now cater for the events
        el.addEvents({
            change: function() {
                // when value changes
                var value = el.get("value").trim(), placeholder = el.retrieve("placeholder");
                if (value != placeholder) {
                    // once it changes, remove this check and remove the unmoddedClass
                    el.removeClass(this.options.unmoddedClass).removeEvents("change");
                }
            }.bind(this),

            focus: function() {
                var value = el.get("value").trim(), placeholder = el.retrieve("placeholder");
                if (value == placeholder) {
                    el.set("value", "").removeClass(this.options.unmoddedClass);
                }
            }.bind(this),
            blur: function() {
                var value = el.get("value").trim(), placeholder = el.retrieve("placeholder");
                if (value == placeholder || value == "") {
                    el.set("value", placeholder).addClass(this.options.unmoddedClass);
                }
            }.bind(this)
        });
    }

});

new mooPlaceholder().attachToElements();

body {
    font-family: verdana;
    font-size: 12px;
}
input.foo {
    border: 1px solid #000;
    padding: 2px;
}
input.unchanged {
    color: #A9A9A9;
}

<form id="myform">
    <input id="foo" name="foo" placeholder="gay" class="foo" />
    <input id="foo2" name="foo2" placeholder="bar" class="foo" />
    <input id="foo3" name="foo3" class="foo" value="no placeholder=" />
</form>

jsFiddle