To answer the original question: if the web form is designed for processing
a paper form (data processing), it should follow the general information
flow of the paper form for easy reference. However, since web medium is more
dynamic than paper, form field dependencies can be implemented via various
progressive disclosure methods described in the [excellent] book by Luke.
Thus the form can be simplified.
Will Evans wrote:

> The best place to start is read this book review on B&A I wrote about
> LukeW's Web Form Design, here: *http://tinyurl.com/6ryep9
>
To answer a question by Praveen Kumar
Verma<http://www.boxesandarrows.com/person/1392-praveenkvma> to
Will's review:
"The client suggested using two columns of fields to utilize the space. As a
good designer I protested but wanted to look for research on two columns
approach. Sadly the book does not answer my question. May be, the question
is weird but I am in this situation."

The book does answer this question (if not explicitly the way Praveen
phrased it): group related fields horizontally to utilize the space
effectively.

For instance: [Prefix] [First Name] [MI] [Last Name] [Suffix].

See Figure 4.3 on page 58.

-- 
Oleh Kovalchuke
Interaction Design is design of time
http://www.tangospring.com/IxDtopicWhatIsInteractionDesign.htm
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