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I think the best way to do it is with CSS. For example, you may be able to achieve the result you want with the white-space property. Possible Values are: normal¦pre¦nowrap
Hmm... Even though IE doesn't do what you want, it seems it is within the spec (doesn't do a line break on any white space), even though this is not too sensible in the context of a form the user is filling in.
I'm afraid I don't know the answer. Perhaps a CSS guru might be able to help, so perhaps ask on the CSS forum.
Of course, if you don't find a solution, (putting on flame proof jacket now...) you could choose to just use the wrap attribute you used to use. It is not valid XHTML, but it never stopped you before and it was never valid HTML. (I'll probably get my WebmasterWorld membership revoked for that ;) )