Comment 2 for bug 475013

The User module provides a MENU_CALLBACK for user autocomplete.

In the form builder

$from['user'] = array(
      '#type' => 'textfield',
      '#title' => t('User'),
      '#autocomplete_path' => 'user/autocomplete',
      '#default_value' => isset($form_state['values']['user']) ? $form_state['values']['user'] : '',
      '#required' => TRUE,
);

In the form validation

$username = $form_state['values']['user'];
$user = user_load(array('name' => $username));
if(!$user) {
      form_set_error('dest', t('Unknown user %username', array('%username' => $username)));
}

The user_load has to be repeated in the submit handler.