Código HTML:
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
<html xmlns="http://www.w3.org/1999/xhtml">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8" />
<title>Documento sin título</title>
<script type="text/javascript" src="jquery-1.5.2.min.js"></script>
<script>
$(document).ready(function(){
$('#texto').keydown(function(){
var palabras = $(this).text().split(" ");
var texto = palabras.join("</span><span>");
$('#div_texto').html('<span>' + texto + '</span>');
$('#div_texto span').click(function() {
alert($(this).text());
});
});
});
</script>
</head>
<body>
<table width="500" border="1" cellspacing="0" cellpadding="0">
<tr>
<td><label for="texto"></label>
<textarea name="texto" id="texto" cols="45" rows="5"></textarea></td>
</tr>
<tr>
<td><div id="div_texto" style="background-color:#096; color:#FFF;"></div></td>
</tr>
</table>
</body>
</html> Se me ocurre eso, se documenta solo, prueba y nos cuentas :)