Here's what it looked like.
Since you are probably a little more astute than me, you've likely guessed that in order to populate the field, you have to click on the label! Once you click the 'Product' link, a list of possible values appears in a modal dialog. So what's wrong with this? Sure it works and once I figured that out, all was fine. However, I wasted time that was completely unnecessary.
While the label is in a different color, it wasn't underlined, even when I hovered over it. There were no tool tips, so basically I had no idea that this text was actionable until I clicked it. The cursor changed at least, but when users are in a hurry, this is easy to miss. I've talked about the idea of affordance before. This is the concept that an object's properties or characteristics imply the functionality of that object. In this case, the label did not have any affordances that I normally attribute to actionable text except for the color, which explains why I missed it at first. I just thought the field was being highlighted for some purpose I was not yet aware of. The designer assumed I would take it's meaning one way, but I assumed something completely different. The old warning about assuming is definitely true in interface design!
In addition to the affordance problem, another glaring deficiency here was the poor learnability of the system. Learnability is a measure of how quickly the user can figure out the system and remember the functionality for next time. Because the designer used non-intuitive functionality, it was difficult to learn and then hard to remember. Now that this has happened twice, I THINK I should remember this, but if I don't revist this application for another 6 months, it's quite possible I won't.
When you are building your interface, remember that your goal is to gently guide the user through the task before them. Each element that requires input should be blindingly obvious and if not, you need to take some steps to make it so. The designer could easily fix the problem in this example by adding some text telling the user that they must click the field label to view the list of choices. Perhaps more elegant would be a button next to the field or in modern UIs, the ability to just start typing and using auto-suggest functionality. Any of these options would be fairly trivial to implement, but would go a long way toward increasing the form's usability.
As a designer, I challenge you to approach these constructs through a user's eyes. Better yet, make sure you are doing testing from the very beginning so that you can capture these issues before you write any code. Test early, test often and don't assume. Your users will love you for it.