Hey, I've taken a shot at this problem with pretty good results. Check out 
the code here: https://gist.github.com/833873

The textarea will stretch pretty reliably as the user types/cuts/pastes 
text. The way it does this is by maintaining an internal representation of 
characters-per-line. The only caveat is that you need a PX_PER_CHAR 
constant, so if the user changes font size or you use a variable-width font, 
it wont behave as expected. 

As for calculating the initial size, with this widget you can call 
setText(getText()) (or add your own init() method that does the same).

Hope this helps!

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