Currently, there is an Auto-Complete Control that can be set up for Text Fields. This is a great feature that allows type-ahead and limits what can be entered into the field.

The idea is that cascading auto-complete controls could be configured. For example, if there is an auto-complete control on the Country field, then the State/Province field would be an auto-complete field displaying only the States/Provinces of the selected Country. Another example could be makes and models of automobiles.

Yes, lookup fields can be configured to be cascading. The intent is that native text fields can be configured without having to create custom lookup fields to do the cascading.