JSON + PHP + JQuery + Autocomplete problem

Only started today but I'm having massive problems trying to understand JSON/AJAX etc, I've gotten my code this far but am stumped on how to return the data being pulled by the AJAX request to the jQu开发者_C百科ery Auto complete function.

var autocomplete = new function() {
  this.init = function() {
    $('#insurance_destination').autocomplete({
      source: lookup
    });
  }

  function lookup() {
    $.ajax({
      url: "scripts/php/autocomplete.php",
      data: {
        query: this.term
      },
      dataType: "json",
      cache: false,
      success: function(data) {
        for (key in data) {
          return {
            label: key,
            value: data[key][0]
          }
        }
      }
    });
  }
}

And example of the JSON string being returned by a PHP script

{
  "Uganda": ["UGA", "UK4", "Worldwide excluding USA, Canada and the Carribbean"]
}

Normally, you don't have to do ajax query yourself:

$('#insurance_destination').autocomplete('url_here', {options_here});

That's assuming we're talking about standard jquery autocomplete plugin. Do I understand you correctly?

edit Check api
http://docs.jquery.com/Plugins/Autocomplete/autocomplete#url_or_dataoptions
There are also some examples.

This is the code I've ended up with, it works in Chrome and Firefox but not in IE 6/7...

var autocomplete = new function (){
    this.init = function() { 
        $('#insurance_destination').autocomplete({ 
            source: function(request, response) {
                debugger;
                $.ajax({
                    url: "scripts/php/autocomplete.php",
                    dataType: "json",
                    data: {query:this.term},  
                    success: function(data) {
                    response($.map(data.countries, function(item) {
                        return {
                            label: '<strong>'+item.name+'</strong>'+' '+item.description,
                            value: item.name,
                            code : item.region
                        }
                    }))
                }
            })
        },
        minLength: 2,
        select: function(event, ui) {
            $('#insurance_iso_code_hidden').val(ui.item.code);
        },
        open: function() {
        },
        close: function() {

        }
        });  
    } 


    }