Problems using autocomplete within a (modal) dialog

Problems using autocomplete within a (modal) dialog

There are several issues using autocomplete within a (modal) dialog. Most notably:
1) Autocomplete list is clipped by ui-dialog. This can be resolved by overriding the css.
2) To achieve a fixed height of the autocomplete list one can override ui-autocomplete css. However, clicking on scroll button in dialog scenario still causes blur event and autocomplete list closes. Any suggestions?

Somewhat unrelated - autocomplete plugin adds each individual item to the ul list. I think the performance could be very much improved if items were rendered and then added to the list as single update.

Goran