for Chrome and Safari (i haven't tried others) the equation is here:
(font size) = ((line width) - 6.3799) / 25.407
P = Math.floor ((W - 6.3799) / 25.407);
P = Math.floor (Factor*(8+W/65));
you would experience an even smoother change in font size.
here's a link to my jquery code for resizing: http://www.landlessness.net/2010/08/jquery-auto-resize-fonts.html
and the html/jquery i used to run the experiments: http://www.landlessness.net/2010/08/font-size-versus-line-length_09.html