Edit in JSFiddle

Fx.Diff = new Class({
    Extends: Fx,
    count: 0,
    render: $empty,
    set: function(now){
        now = now.round();
        var diff = now - this.count;
        if (diff) {
            this.render(diff, now);
            this.count += diff;
        }
        return this;
    }
});

Fx.Typewriter = new Class({
    
    Extends: Fx.Diff,
    
    options: {
        useCurrentText: false
    },
    
    initialize: function(element, options){
        this.element = document.id(element);
        this.parent(options);
        if (this.options.useCurrentText) {
            this.textArray = this.element.get('text').split('');
            this.element.set('text','');
        }
    },
    
    start: function(text){
        if (text){
            this.textArray = text.split('');
        }        
        this.parent(0, this.textArray.length);
        return this;
    },
    
    render: function(diff, now){
        var text = this.textArray.filter(function(item, index){
            return index < now;
        });
        this.element.set('text', text.join(''));
    }
    
});

var myFx;
window.addEvent('domready',function(){
    
    myFx = new Fx.Typewriter('text',{
        useCurrentText: true,
        duration: 5000,
        transition: 'circ:out',
        link: 'cancel'
    }).start();
    
    /* demo utility stuff */
    $('options').addEvent('submit',function(event){
        event.stop();
        myFx.setOptions(this.toPairs());
        myFx.options.duration = myFx.options.duration.toInt();
        myFx.start($('the-text').value);
    });
    
});

Element.implement({
    
    toPairs: function(){
        var json = {};
        this.getElements('input, select, textarea', true).each(function(el){
            if (!el.name || el.disabled || el.type == 'submit' || el.type == 'reset' || el.type == 'file') return;
            var value = (el.tagName.toLowerCase() == 'select') ? Element.getSelected(el).map(function(opt){
                return opt.value;
            }) : ((el.type == 'radio' || el.type == 'checkbox') && !el.checked) ? null : el.value;
            $splat(value).each(function(val){
                if (typeof val != 'undefined') json[el.name] = val;
            });
        });
        return json;
    }
    
});

<form id=options>
    <p>
        Transition <select name=transition>
        <option>linear</option>
        <option>pow:in</option>
        <option>pow:out</option>
        <option>pow:in:out</option>
        <option>expo:in</option>
        <option>expo:out</option>
        <option selected>expo:in:out</option>
        <option>circ:in</option>
        <option>circ:out</option>
        <option>circ:in:out</option>
        <option>sine:in</option>
        <option>sine:out</option>
        <option>sine:in:out</option>
        <option>back:in</option>
        <option>back:out</option>
        <option>back:in:out</option>
        <option>bounce:in</option>
        <option>bounce:out</option>
        <option>bounce:in:out</option>
        <option>elastic:in</option>
        <option>elastic:out</option>
        <option>elastic:in:out</option>
        <option>quad:in</option>
        <option>quad:out</option>
        <option>quad:in:out</option>
        <option>cubic:in</option>
        <option>cubic:out</option>
        <option>cubic:in:out</option>
        <option>quart:in</option>
        <option>quart:out</option>
        <option>quart:in:out</option>
        <option>quint:in</option>
        <option>quint:out</option>
        <option>quint:in:out</option>
        </select>
    </p>
    <p>
        Duration: <input type=text name=duration value=3000>
    </p>
    <p>Text to write:<br>
        <textarea id=the-text rows=5 cols=40>Consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.</textarea>
    </p>
    <p>
        <input type=submit value=Go!>
    </p>
</form>

<p id=text>Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.</p>

body { font-family: helvetica, arial; }
#text {
    min-height: 200px;
    text-align: left;
    padding: 10px;
    font-size: 14px;
    font-family: 'courier new', courier;
    color: #fff;
    text-shadow: 0 -1px 1px #3267b8;
    border: solid 1px #3267b8;
    -webkit-box-shadow: 0 3px 6px rgba(0,0,0,0.5);
    -moz-box-shadow: 0 3px 6px rgba(0,0,0,0.5);
    
    background-image: -moz-linear-gradient(top, #75a3dc, #3267b8); /* FF3.6 */
    background-image: -webkit-gradient(linear,left top,left bottom,color-stop(0, #75a3dc),color-stop(1, #3267b8)); /* Saf4+, Chrome */
    filter:  progid:DXImageTransform.Microsoft.gradient(startColorStr='#75a3dc', EndColorStr='#3267b8'); /* IE6,IE7 */
    -ms-filter: "progid:DXImageTransform.Microsoft.gradient(startColorStr='#75a3dc', EndColorStr='#3267b8')"; /* IE8 */
}

#options {
    margin-top: 20px;
    padding: 10px;
    background: #f0f0f0;
    border: solid 1px #888;
}

p {
    margin-top: 1em;
    margin-bottom: 1em;
}