Autoosize uma textarea usando protótipo

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"
  "http://www.w3.org/TR/html4/loose.dtd">
<html>
    <head>
        <script src="http://www.google.com/jsapi"></script>
        <script language="javascript">
            google.load('prototype', '1.6.0.2');
        </script>
    </head>

    <body>
        <textarea id="text-area" rows="1" cols="50"></textarea>

        <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;
            };

            // You could attach to keyUp, etc. if keydown doesn't work
            Event.observe('text-area', 'keydown', resizeIt );

            resizeIt(); //Initial on load
        </script>
    </body>
</html>
Code with bulbul