I've read through previous submissions and unfortunately none of the suggestions have worked for me. I'm working with fairly large blocks of text (1500+ characters) and wondered if anyone had found a workaround. Autoformat doesn't solve the issue, at least not in Excel 2003. Thanks.

If you get an ALT+Enter in there and delete it, it breaks properly. At the end it gives an extra line.

You'll have to manually insert ALT-ENTER breaks somewhere between 80-100 characters per line to get it to display properly. Further, this page lists Excel's limitations in the Worksheet and workbook specifications section:
http://office.microsoft.com/en-us/excel/HP051992911033.aspx?pid=CH062527721033

It appears on 1,024 characters are going to display, though the call can manipulate 32,767 characters in the cell.

The real workaround is not use Excel to manipulate text this way.