Something like this would do it:
http://jsfiddle.net/Zxuj7/
$('#test_textarea').keyup(function () {
var new_stuff = $(this).val();
new_stuff = new_stuff.replace(/[\n\r]+/g,""); // clean out newlines, so we dont get dups!
var test = new_stuff.replace(/(.{10})/g,"$1\n");
$(this).val(test);
});
However, be aware that it doesn't work that well with the "deleting" of characters. If you give it a go, you will notice that when you actually delete a character and the code runs, it will put you at the end of the textarea again (because its "overwriting" the value)
UPDATE:
You may actually be better formatting AFTER they have finished editing the textarea - i.e using blur();
$('#test_textarea').blur(function () {
// leaving the field... so lets try and format nicely now
var new_stuff = $(this).val();
new_stuff = new_stuff.replace(/[\n\r]+/g,""); // clean out newlines, so we dont get dups!
new_stuff = new_stuff.replace(/(.{10})/g,"$1\n");
$(this).val(new_stuff);
});
Although that doesn't do it in real time - it does work better when deleting/editing the contents