AS you can see on this test page:
when you begin entering data the labels disappears.
Seems like your theme or another plugin is doing that. You'll have to track down the source. Follow these steps please http://www.gravityhelp.com/documentation/page/Testing_for_a_Theme/Plugin_Conflict
Indeed it is a conflict with the theme.
dactivating the theme solves it.
But leaving the theme on and deactivating all plugins but Gravity Forms leaves the problem intact.
On the theme forum, I found that it could be a conflict with the jquery.infieldlabel
Do you have a pointer I can send to the theme developer to help him solve the problem?