[jQuery] Autocomplete: highlight is not working if the result contains escaped html characters

I have textfield where I am using the autocomplete. I want to allow users to use html in the input . And while outputting the result I am escaping the html. Now there is an issue if I use the default highlight feature of the autocomplete plugin. If the result contains escaped html characters,

[jQuery] Autocomplete plugin: Google Chrome - Focus issue with the scrollbar

I am using jQuery 1.3.2. There is an input field in a form. Clicking on the input field opens a div as a dropdown. The div contains a list of items. As the list size is large there is a vertical scrollbar in the div. There is a blur event on the input field, to close the drop down when clicked