I'm not sure exactly what you mean by "dynamic text box" but it was just a contenteditable div. There have been at least two complete rewrites since I was involved, nowadays I believe it's a canvas with all of the editing, formatting, layout, and rendering done "by hand" in JavaScript.
The kind of text box used in php forums ... called text area I think, and this would be hidden every time the focus went away and an HTML based layout presented in its place. This seemed to be clunky but I thought that was what made writely possible. ContentEditable is such a breath of fresh air had I ever known about it. I wonder if IE6 supported that.
