Been trying this out for spike, written in python of course ;) Does something similar to wordle.net, though I have no idea how their alogorithm works!
Algorithm uses edges and collision detection to work quite fast ( that cloud generated in 0.03s ) - should be fast enough for a little animation :)
update...
Added a bunch of options and actually the ability to render text now. You'll never guess the input to this but I quite like the output :)
