GolfScript, 177 175 173 167 164 163 144 131 130 chars
Slow - 3 minutes for the sample text (130)
{32|.123%971{;)}if}/]2/{~~\;}$22<.0=~:2;,76\-:1'_':0*' '\@{"
|"\~1*2/0*'| '@}/
Explanation:
{ #loop through all characters
32|. #convert to uppercase and duplicate
123%97< #determine if is a letter
n@if #return either the letter or a newline
}% #return an array (of ints)
]''* #convert array to a string with magic
n% #split on newline, removing blanks (stack is an array of words now)
"oftoitinorisa" #push this string
2/ #split into groups of two, i.e. ["of" "to" "it" "in" "or" "is" "a"]
- #remove any occurrences from the text
"theandi"3/-#remove "the", "and", and "i"
$ #sort the array of words
(1@ #takes the first word in the array, pushes a 1, reorders stack
#the 1 is the current number of occurrences of the first word
{ #loop through the array
.3$>1{;)}if#increment the count or push the next word and a 1
}/
]2/ #gather stack into an array and split into groups of 2
{~~\;}$ #sort by the latter element - the count of occurrences of each word
22< #take the first 22 elements
.0=~:2; #store the highest count
,76\-:1 #store the length of the first line
'_':0*' '\@ #make the first line
{ #loop through each word
"
|"\~ #start drawing the bar
1*2/0 #divide by zero
*'| '@ #finish drawing the bar
}/
"Correct" (hopefully). (143)
{32|.123%971{;)}if}/]2/{~~\;}$22<..0=1=:^;{~76@,-^*\/}%$0=:1'_':0*' '\@{"
|"\~1*^/0*'| '@}/
Less slow - half a minute. (162)
'"'/' ':S*n/S*'"#{%q
'\+"
.downcase.tr('^a-z','
')}\""+~n%"oftoitinorisa"2/-"theandi"3/-$(1@{.3$>1{;)}if}/]2/{~~\;}$22<.0=~:2;,76\-:1'_':0*S\@{"
|"\~1*2/0*'| '@}/
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