See the attached image:

First version provided an input box with the proposed value.
As usual, the users want some business rules added with some options to change things.

The application being maintained is a mixture of forms that bring up other forms. This form with a sub form has plenty of real-estate to use.

The PAD Group allows users to assign an existing Pad Group or choose a line item "add new Pad Group"

So, the question: should an entire Pop-up Form be created?
Or, should everything be disabled - and a new area become visible for the user to complete or cancel?

There probably are not any wrong answers.

I would go for the popup and modal form so that the users eyes are fixated on that form until it's closed. If that piece of information is critical then you want to ensure whatever text is entered there was chosen by the user.