Drupal 7 - Giving correct path to callback function in #autocomplete_path
You've just forgotten to define the path for the autocomplete itself:

function tdyards_searchbox_menu(){

  $items['tdyards/tdyards_searchbox'] = array(
    'title' =&gt; 'Autocomplete (simple)',
    'page callback' =&gt; 'drupal_get_form',
    'page arguments' =&gt; array('autocomplete_form'),
    'access arguments' =&gt; array('access user profiles'),
    ); 

  $items['tdyards/tdyards_searchbox/autocomplete'] = array(
    'title' =&gt; 'Autocomplete',
    'page callback' =&gt; 'tdyards_searchbox_autocomplete_callback',
    'access arguments' =&gt; array('access user profiles'),
    'type' =&gt; MENU_CALLBACK,
  );

  return $items;

}


Add that, clear the caches, and it should work.