You could also (two years later, mind you) try asuggest, it offers word completion inside the textarea after the caret.
A simple example:
var suggests = ["hello", "world"];
$("#text-area1").asuggest(suggests);
This will match things easily, no limits, no minimum character count.
More bells and whistles:
var suggests = ["head", "hello", "heart", "health"];
$("#text-area1").asuggest(suggests, {
'endingSymbols': ', ',
'minChunkSize': 3,
'delimiters': ':',
'stopSuggestionKeys': [$.asuggestKeys.RETURN]
});
This would require a three (or more) character to start matching, as well as requiring the string to begin with the characater :, place a comma , after each completion, and stop bugging you after you hit the RETURN key.
With some tab-cycling, to be discrete:
var suggests = ["head", "hello", "heart", "health", "horizontal"];
$("#text-area1").asuggest(suggests, {
'autoComplete': false,
'cycleOnTab': true
});
This won't offer up suggestions, but will cycle through the matches when the user hits their TAB key.