this забыли пропустить через $
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" />
<title>Документ без имени</title>
<script src="jquery-1.3.2.js" type="text/javascript"></script>
<script type="text/javascript">
$(document).ready(function(){
$('#select').change(function(){
var id = $(this).val();
$('#text').val(id);
});
});
</script>
</head>
<body>
<form id="form1" name="form1" method="post" action="">
<label>
<select name="select" id="select">
<option value="1">select1</option>
<option value="2">select2</option>
</select>
</label>
<label>
<input type="text" name="textfield" id="text"/>
</label>
</form>
</body>
</html>