Customize Login Widget (set Default values in login input fileds) I added the login widget block to a page

I want to set the default value text "username" and "password" to the input fields.

It currently looks like 1. I want it to look like 2
There are a couple modules for this (quotes included are from their project pages):


In Field Labels:


  ... creates integration with the In-Field Labels jQuery Plugin.

Compact Forms:


  ... presents text fields for selected forms in a more compact fashion using jQuery.
  
  The form item/element fields are overlaid with their respective labels. When the user focuses a field the label fades away nicely, and if the field is left empty the label fades back in again.
  
  By default, only the user login block is switched to compact style, but the behavior can be added to any form by adding the corresponding CSS ids to the Compact Forms configuration.
  
  
  Degrades back to the original form when JavaScript is switched off.
  Fields like textareas and checkboxes are currently not affected.
  Inspired by A List Apart.