CCK Autocomplete for existing field data widget giving HTTP 302 error

Hello, I'm using CCK autocomplete widget but when I type the first letter in the text box I get a 302 http error. If I click ok to the error and continue typing the error is still present but at least I'm able to save the value. Have anyone experienced similar error or knows how to fix it? I really need a way to allow a user, with the right access permissions, to submit data.

Ideally, I need a select list with an option to add new values to the list while submitting new data. Since there is not a functionality in CCK that allows that, I looked at the autocomplete widget that gives the user an option to add new records.

Please advice.