After looking for a jQuery plugin for handling a tag suggestion form field, also with a autocomplete feature – in much the same way ZenDesk.com does – I ended up developing a customization of jQuery UI that does the same interaction.
UPDATE June 19th, 2011: due to other pressing priorities I delegated the development/support of this plugin to Alex Ehlke who is now doing an amazing job keeping this plugin up to date. Links below are now pointing to his repository. Thanks for your amazing help, Alex!
Official page for the project: http://aehlke.github.com/tag-it/
See the screenshot
See the Demo
Fork Tag it! on Github
Download the Tag it! plugin