I didn't test extensively, but this seems to work:
(I found the "insertAtCursor" function at http://alexking.org/blog/2003/06/02/inserting-at-the-cursor-using-javascript#comment-3817)
<textarea id="text-area" rows="20" cols="100"></textarea>
<script>
document.getElementById("text-area").onkeydown = function(e) {
if (!e && event.keyCode == 9)
{
event.returnValue = false;
insertAtCursor(document.getElementById("text-area"), " ");
}
else if (e.keyCode == 9)
{
e.preventDefault();
insertAtCursor(document.getElementById("text-area"), " ");
}
};
//http://alexking.org/blog/2003/06/02/inserting-at-the-cursor-using-javascript#comment-3817
function insertAtCursor(myField, myValue) {
//IE support
if (document.selection) {
var temp;
myField.focus();
sel = document.selection.createRange();
temp = sel.text.length;
sel.text = myValue;
if (myValue.length == 0) {
sel.moveStart('character', myValue.length);
sel.moveEnd('character', myValue.length);
} else {
sel.moveStart('character', -myValue.length + temp);
}
sel.select();
}
//MOZILLA/NETSCAPE support
else if (myField.selectionStart || myField.selectionStart == '0') {
var startPos = myField.selectionStart;
var endPos = myField.selectionEnd;
myField.value = myField.value.substring(0, startPos) + myValue + myField.value.substring(endPos, myField.value.length);
myField.selectionStart = startPos + myValue.length;
myField.selectionEnd = startPos + myValue.length;
} else {
myField.value += myValue;
}
}
</script>
EDIT: Modified the script so it doesn't use jQuery.