A couple quick lines of jQuery allows you to free up real estate on your site (useful for mobile layouts) and add some interactivity at the same time:
The jQuery
$('#account-email, #account-password').focus(function() {
if($(this).val() in {'email' : '', 'password' : ''})
$(this).val('');
});
The HTML
<form action="" method="post">
<input type="email" id="account-email" name="email" value="email" />
<input type="text" id="account-password" name="password" value="password" />
</form>