Multi-Select Selection Display: List vs. "Tag Cloud"

Question

I wonder if one method performs better than the other and if there are any advantages or disadvantages. In my scenario, users will be adding more than 3 countries and will edit that list using the same functionality.

Interaction Specifications

1. Auto-suggest a list of countries as the user types and — upon making a selection — the system provides feedback to show the selection.
2. Show a list of selections beneath the form field or a "tag cloud" selection within the form field.

Advantages/Disadvantages

1. List Format: Easier to scan a list of items (one eye fixation, one column) and ensures that the form field is always the same size. However, the list may get big and push other form fields down the page.
2. Tag Cloud: Combines search and selection into one area. May be harder to find a specific country when users add a lot of countries.

Examples

Answer 1

Using the multi-select jQueryUI plugin 'Chosen' you may ensure the form field is always the same size while still saving space, as it is a drop down and shares search/tag area.

An even more powerful jQuery plugin simply called 'multiselect' itself, allows you to keep the interface open longer while checking off different options. This would potentially solve all of the issues mentioned regarding a lot of selections plus saving space.

Many others can be found here in the jQuery plugin site. I think your second solution is best as it keeps the form out of the way, but perhaps one of these can keep you from having any feature conflict at all.