In order to change the “Search entire store here…” phrase on the search box of Magento 1.7, there is a clean way of doing this without touching any php file.
Download the csv file,
open file this file using excel or open office,
Change column “B” line 40, to which ever phrase you would like to show @ magento’s search box. save the file as csv being careful not to corrupt the file.
Upload file… Remember to clean caches at magento!