Linkify is a simple, but effective bookmarklet that makes it easy to create hyperlinks from a term or phrase, in browser text entry fields. To use it, just select some text, and then click on the Linkify. Then an iframe appears with search results from Google.
Each result entry also has a "create link" link. If that link is selected, the selected text is replaced with the html link.
[via Matt Cutts SEO blog]