Change input field placeholder text with jQuery w/ password

// This script is an update of http://www.perfectline.co/2009/10/change-input-field-placeholder-with-jquery/
// If you don't need input[type=password] support use http://pastebin.com/w7PhFQdu

$(document).ready( function() {
    $(".placeholder").each( function( ) {

        var elem = $(this);
        var text = elem.attr('rel');

        if( elem.attr('type') === 'password' )
            elem.type = 'password';

        if ( elem.val() === '' ) {
            elem.val( text );

            if( elem.type === 'password' )
                elem.attr('type', 'text' );
        }

        elem.focus( function() {
            if ( elem.val() === text ) {
                elem.val('');

                if( elem.type === 'password' )
                    elem.attr('type', 'password');
            }
        });

        elem.blur( function() {
            if ( elem.val() === '' ) {
                elem.val( text );

                if( elem.type === 'password' )
                    elem.attr('type', 'text');
            }
        });

        var form = elem.parents('form:first');

        form.submit( function() {
            if (elem.val() === text)
                elem.val("");
        });

    });
});