http://mg.to/2006/02/27/easy-dom-creation-for-jquery-and-pro...
It's based on Bob Ippolito's version from 2005. :-)
The comments on the post have a few other interesting implementations that others contributed.
At the time I got pretty excited about this idea, but I abandoned it after a while for performance reasons. I was building large DOM structures and it was really slow. I knew that innerHTML was faster, so I tried keeping the same syntax and generating HTML from it instead of DOM insertions - and it was almost as slow that way!
Then I realized that it was just the sheer amount of JavaScript code being run that was slowing it down. I changed my code to build HTML strings with array pushes and a join at the end and then innerHTML to insert, and it was much faster.
Of course, JavaScript has gotten a lot faster since then (at least in new browsers!), so the more code-intensive techniques may be more practical now.