The logic behind that control is
1: Styling one DIV/SPAN/UL like a TEXTBOX and insert a border less textbox in it.
2: Once the user select something from your autocomplete control it create one more div with close button or what ever and place left side of your border less textbox
3: And keep appending items in the parent DIV/SPAN/UL when user select item from auto complete control.
Happy days..
Got to the
http://loopj.com/jquery-tokeninput/[
^] and please use firbug to see what is happening behind the scene.
Thanks