On forms, is inline placeholder text better than a label outside each field?
I am making a simple registration form for my website. I'm in doubt about how to label inputs: should I use text (i.e. Username: next to the input box), the placeholder attribute (like the "search" word inside the search bar), or both?
For a graphical example of what I mean, see this jsFiddle.
HTML5 note: I'm assuming the user has a browser with support for HTML5. The fallback content will only use labels.