<script type="text/javascript" language="javascript">
  resizeIt = function() {
    var str = $('text-area').value;
    var cols = $('text-area').cols;

    var linecount = 0;
    $A(str.split("\n")).each( function(l) {
      linecount += Math.ceil( l.length / cols ); // take into account long lines
    } )
    $('text-area').rows = linecount + 1;
  };

  Event.observe('text-area', 'keydown', resizeIt ); // you could attach to keyUp or whatever if keydown doesn't work
  resizeIt(); //initial on load
  </script>