I think such a display would dbe more intuitive for the user!!
(http://img76.imageshack.us/img76/4003/sfgy1.png)
IMO this is unnecessary especially in 2.0 which is WYSIWYG anyway
As a further note, that means we'd have to code special form elements as that isn't possible to do in normal HTML select boxes. This would (possibly) break functionality for all users that run with Javascript disabled (and a lot actually do).