Thats supposed to be a feature. The assumption: Its very annoying if the validation starts whining about invalid fields before the user even had the chance to enter a correct value. As long as a field isn't marked as invalid (eg. before first submit or blur with a non-empty invalid field), no onkeyup validation happens.
Given this information, Rick, it sounds like you want "onblur" rather than "onkeyup". This will wait until the user tabs or clicks to the next field before checking if the field is valid or not.
-- Josh
