Is it the jquery reference that doesn't work, or the code that I provided. And which version of IE? The code that I provided most definately does work in IE9, IE8, IE7 and IE6
Currently that code will prevent the text being highlighted when the default value is replaced.
If you want it to always prevent the text being highlighted on that field, then you will need to move the if statement inside the setTimeout event and always update the value from within it.