Place tag before input text field in search-block-form
The "input" type you are referring to, is actually the element defined inside the array $form['search_block_form'],  of #type 'textfield'. That's the element that provides the input field when rendered. 

In order to add a &lt;li&gt; tag in front and back of this input field, try using the properties   #prefix and #suffix. Also I would suggest creating a custom module for this, avoid using it inside the template.php file. Try the following (haven't tested it myself, though).

function myModule_form_alter(&amp;$form, &amp;$form_state, $form_id) {
   if ($form_id == 'search_block_form') {
     $form['search_block_form']['#prefix'] = '&lt;li&gt;';
     $form['search_block_form']['#suffix'] = '&lt;/li&gt;';
   }
}