My bash does this automatically and I do not have a ~/.inputrc file. I'm on Mac OS X 10.8.2 using the Terminal app (which is a bash command line interface). I assumed this was a default feature of bash but apparently not. If somebody can explain to me why I have this feature by default, I would be grateful.
Bash will up/down between past commands, but it's unfiltered. This lets you type the first few characters you know you're looking for to find it faster.