Brad, I've looked at Phil's site and so far am unable to figure out why this is happening. I've opened it in firebug and the box is going 100% within the outter div, the text however keeps going. I can set the width on the box and it has no impact other than to change the size of the box.
I did figure something out, it's not "wrapping" until there's a tag with a space in it... Somehow the way we're building the string of tags isn't putting "real" spaces in between each tag??? I'm not exactly sure how that's possible. I think it's a fairly easy fix in code for the next release though.
We're currently populating a literal for the divider of the tags.
li.Text = ", ";
It looks like the doesn't work properly.