lags of a variable, with a factor

For sequential analysis of sequences of events, I want to calculate a
series of lagged
versions of a (numeric or character) variable. The simple function below
does this,
but I can't see how to generalize this to the case where there is also a
factor variable
and I want to calculate lags separately for each level of the factor
(by). Can anyone help?
...

 > do.call(rbind, lg)

lag0 lag1 lag2
1.1 b <NA> <NA>
1.2 d b <NA>
1.3 d d b
1.4 c d d
1.5 b c d
2.1 b <NA> <NA>
2.2 b b <NA>
2.3 b b b
2.4 d b b
2.5 a d b

 >

Hi Michael,
Maybe this will do it.

lags <- function(x, k=1, prefix='lag', by) {
   if(missing(by)) {
   n <- length(x)
   res <- data.frame(lag0=x)
   for (i in 1:k) {
     res <- cbind(res, c(rep(NA, i), x[1:(n-i)]))
   }
   colnames(res) <- paste0(prefix, 0:k)
   return(res)
   }
   else {
    for(levl in levels(by)) {
     nextlags<-lags(x[by==levl,],prefix=prefix)
     rownames(nextlags)<-paste(levl,rownames(nextlags),sep=".")
     if(exist(res)) res<-rbind(res,nextlags)
     else res<-nextlags
    }
   }
}

Jim