Requirements

Download this jQuery multi-select plugin.

Extract the files and put them in a folder called multiselect in your static folder.

Include the plugin in your model.

response.files.append(URL(r=request,c='static/multiselect',f='jquery.multiSelect.js'))
response.files.append(URL(r=request,c='static/multiselect',f='jquery.multiSelect.css'))

Setting up

Place the widget code in your model.

def multiselect_widget(f,v):
    import uuid
    d_id = "multiselect-" + str(uuid.uuid4())[:8]
    wrapper = DIV(_id=d_id)
    inp = SQLFORM.widgets.options.widget(f,v)
    inp['_multiple'] = 'multiple'
    inp['_style'] = 'min-width: %spx;' % (len(f.name) * 20 + 50)
    if v:
        if not isinstance(v,list): v = str(v).split('|')
        opts = inp.elements('option')
        for op in opts:
            if op['_value'] in v:
                op['_selected'] = 'selected'            
    scr = SCRIPT('jQuery("#%s select").multiSelect({'\
                 'noneSelected:"Select %ss"});' % (d_id,f.name))
    wrapper.append(inp)
    wrapper.append(scr)
    if request.vars.get(inp['_id']+'[]',None):
        var = request.vars[inp['_id']+'[]']
        if not isinstance(var,list): var = [var]
        request.vars[f.name] = var
        del request.vars[inp['_id']+'[]']
    return wrapper

Assign the widget to your field.

db.stuff.name.widget = multiselect_widget

Try it out

Build a form with the widget in your controller

def index():
    db.stuff.name.requires = IS_IN_SET(['Apples','Oranges','Bananas','Kiwis','Lemons'],multiple=True)
    form = SQLFORM(db.stuff)
    if form.accepts(request.vars,session):
        response.flash = 'Got it'
    return dict(form=form)

Shazam!